Correlation Between Mfs Blended and William Blair

Can any of the company-specific risk be diversified away by investing in both Mfs Blended and William Blair 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 William Blair 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 William Blair Emerging, you can compare the effects of market volatilities on Mfs Blended and William Blair 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 William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and William Blair.

Diversification Opportunities for Mfs Blended and William Blair

0.78

Correlation Coefficient

Mfs Blended  William Blair

Poor diversification

The 3 months correlation between Mfs and William is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and William Blair Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Emerging 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Emerging has no effect on the direction of Mfs Blended i.e., Mfs Blended and William Blair go up and down completely randomly.

Pair Corralation between Mfs Blended and William Blair

Assuming the 90 days horizon Mfs Blended Research is expected to generate 0.97 times more return on investment than William Blair. However, Mfs Blended Research is 1.03 times less risky than William Blair. It trades about 0.21 of its potential returns per unit of risk. William Blair Emerging is currently generating about 0.1 per unit of risk. If you would invest  1,258  in Mfs Blended Research on February 23, 2024 and sell it today you would earn a total of  121.00  from holding Mfs Blended Research or generate 9.62% return on investment over 90 days.

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

Mfs Blended Research  vs.  William Blair Emerging

Mfs Blended Research

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Blended Research are ranked lower than 16 (%) 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 June 2024.

William Blair Emerging

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair Emerging are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, William Blair is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Blended and William Blair

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

The idea behind Mfs Blended Research and William Blair Emerging 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.