Correlation Between Bmo Large-cap and Mfs Lifetime

Can any of the company-specific risk be diversified away by investing in both Bmo Large-cap and Mfs Lifetime at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bmo Large-cap and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bmo Large Cap Growth and Mfs Lifetime 2060, you can compare the effects of market volatilities on Bmo Large-cap and Mfs Lifetime and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bmo Large-cap with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bmo Large-cap and Mfs Lifetime.

Diversification Opportunities for Bmo Large-cap and Mfs Lifetime

0.97

Correlation Coefficient

Bmo Large-cap  Mfs Lifetime

Almost no diversification

The 3 months correlation between Bmo and Mfs is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Bmo Large Cap Growth and Mfs Lifetime 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2060 and Bmo Large-cap is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bmo Large Cap Growth are associated (or correlated) with Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2060 has no effect on the direction of Bmo Large-cap i.e., Bmo Large-cap and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Bmo Large-cap and Mfs Lifetime

Assuming the 90 days horizon Bmo Large Cap Growth is expected to generate 1.52 times more return on investment than Mfs Lifetime. However, Bmo Large-cap is 1.52 times more volatile than Mfs Lifetime 2060. It trades about 0.19 of its potential returns per unit of risk. Mfs Lifetime 2060 is currently generating about 0.23 per unit of risk. If you would invest  2,095  in Bmo Large Cap Growth on May 28, 2025 and sell it today you would earn a total of  199.00  from holding Bmo Large Cap Growth or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bmo Large Cap Growth  vs.  Mfs Lifetime 2060

Bmo Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bmo Large Cap Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Bmo Large-cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Mfs Lifetime 2060

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Lifetime 2060 are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mfs Lifetime may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bmo Large-cap and Mfs Lifetime

The main advantage of trading using opposite Bmo Large-cap and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bmo Large-cap position performs unexpectedly, Mfs Lifetime can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.

The idea behind Bmo Large Cap Growth and Mfs Lifetime 2060 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.