Correlation Between Mfs Technology and Lazard Strategic
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Lazard Strategic 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 Technology and Lazard Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Technology Fund and Lazard Strategic Equity, you can compare the effects of market volatilities on Mfs Technology and Lazard Strategic 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 Technology with a short position of Lazard Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Lazard Strategic.
Diversification Opportunities for Mfs Technology and Lazard Strategic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Lazard is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Lazard Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Strategic Equity and Mfs Technology 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 Technology Fund are associated (or correlated) with Lazard Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Strategic Equity has no effect on the direction of Mfs Technology i.e., Mfs Technology and Lazard Strategic go up and down completely randomly.
Pair Corralation between Mfs Technology and Lazard Strategic
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 1.54 times more return on investment than Lazard Strategic. However, Mfs Technology is 1.54 times more volatile than Lazard Strategic Equity. It trades about 0.24 of its potential returns per unit of risk. Lazard Strategic Equity is currently generating about 0.13 per unit of risk. If you would invest 4,533 in Mfs Technology Fund on September 7, 2024 and sell it today you would earn a total of 821.00 from holding Mfs Technology Fund or generate 18.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs Technology Fund vs. Lazard Strategic Equity
Performance |
Timeline |
Mfs Technology |
Lazard Strategic Equity |
Mfs Technology and Lazard Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs Technology and Lazard Strategic
The main advantage of trading using opposite Mfs Technology and Lazard Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Lazard Strategic 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 Strategic will offset losses from the drop in Lazard Strategic's long position.Mfs Technology vs. Science Technology Fund | Mfs Technology vs. Dreyfus Technology Growth | Mfs Technology vs. Franklin Biotechnology Discovery | Mfs Technology vs. Allianzgi Technology Fund |
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Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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