Correlation Between Mfs Lifetime and Dreyfus Large

Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Dreyfus Large 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 Mfs Lifetime and Dreyfus Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Lifetime 2060 and Dreyfus Large Cap, you can compare the effects of market volatilities on Mfs Lifetime and Dreyfus Large 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 Mfs Lifetime with a short position of Dreyfus Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Dreyfus Large.

Diversification Opportunities for Mfs Lifetime and Dreyfus Large

0.69

Correlation Coefficient

Mfs Lifetime  Dreyfus Large

Poor diversification

The 3 months correlation between Mfs and Dreyfus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2060 and Dreyfus Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Large Cap and Mfs Lifetime 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 Mfs Lifetime 2060 are associated (or correlated) with Dreyfus Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Large Cap has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Dreyfus Large go up and down completely randomly.

Pair Corralation between Mfs Lifetime and Dreyfus Large

Assuming the 90 days horizon Mfs Lifetime is expected to generate 1.38 times less return on investment than Dreyfus Large. But when comparing it to its historical volatility, Mfs Lifetime 2060 is 1.17 times less risky than Dreyfus Large. It trades about 0.21 of its potential returns per unit of risk. Dreyfus Large Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,496  in Dreyfus Large Cap on May 25, 2025 and sell it today you would earn a total of  147.00  from holding Dreyfus Large Cap or generate 9.83% return on investment over 90 days.

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

Mfs Lifetime 2060  vs.  Dreyfus Large Cap

Mfs Lifetime 2060

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Lifetime 2060 are ranked lower than 16 (%) 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.

Dreyfus Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus Large Cap are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dreyfus Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mfs Lifetime and Dreyfus Large

The main advantage of trading using opposite Mfs Lifetime and Dreyfus Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Dreyfus Large 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 Dreyfus Large will offset losses from the drop in Dreyfus Large's long position.

The idea behind Mfs Lifetime 2060 and Dreyfus Large Cap 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.