Correlation Between Mfs Blended and Lazard Emerging

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Can any of the company-specific risk be diversified away by investing in both Mfs Blended and Lazard Emerging 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 Blended and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Blended Research and Lazard Emerging Markets, you can compare the effects of market volatilities on Mfs Blended and Lazard Emerging 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 Blended with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and Lazard Emerging.

Diversification Opportunities for Mfs Blended and Lazard Emerging

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Mfs and Lazard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Mfs Blended 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 Blended Research are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Mfs Blended i.e., Mfs Blended and Lazard Emerging go up and down completely randomly.

Pair Corralation between Mfs Blended and Lazard Emerging

Assuming the 90 days horizon Mfs Blended is expected to generate 1.86 times less return on investment than Lazard Emerging. In addition to that, Mfs Blended is 1.04 times more volatile than Lazard Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.07 per unit of volatility. If you would invest  1,553  in Lazard Emerging Markets on January 25, 2024 and sell it today you would earn a total of  248.00  from holding Lazard Emerging Markets or generate 15.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Mfs Blended Research  vs.  Lazard Emerging Markets

 Performance 
       Timeline  
Mfs Blended Research 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Blended Research are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Mfs Blended may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Lazard Emerging Markets 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Lazard Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Blended and Lazard Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mfs Blended and Lazard Emerging

The main advantage of trading using opposite Mfs Blended and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, Lazard Emerging 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 Lazard Emerging will offset losses from the drop in Lazard Emerging's long position.
The idea behind Mfs Blended Research and Lazard Emerging Markets 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.

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