Correlation Between La Z and Mustang Bio

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both La Z and Mustang Bio 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 La Z and Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between La-Z-Boy and Mustang Bio, you can compare the effects of market volatilities on La Z and Mustang Bio 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 La Z with a short position of Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Z and Mustang Bio.

Diversification Opportunities for La Z and Mustang Bio

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between La Z and Mustang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding La-Z-Boy and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and La Z 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 La-Z-Boy are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of La Z i.e., La Z and Mustang Bio go up and down completely randomly.

Pair Corralation between La Z and Mustang Bio

Considering the 90-day investment horizon La-Z-Boy is expected to generate 0.51 times more return on investment than Mustang Bio. However, La-Z-Boy is 1.97 times less risky than Mustang Bio. It trades about -0.24 of its potential returns per unit of risk. Mustang Bio is currently generating about -0.23 per unit of risk. If you would invest  2,639  in La-Z-Boy on July 2, 2022 and sell it today you would lose (339.00)  from holding La-Z-Boy or give up 12.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

La-Z-Boy  vs.  Mustang Bio

 Performance (%) 
       Timeline  
La-Z-Boy 
La Z Performance
0 of 100
Over the last 90 days La-Z-Boy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

La Z Price Channel

Mustang Bio 
Mustang Performance
0 of 100
Over the last 90 days Mustang Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Mustang Price Channel

La Z and Mustang Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with La Z and Mustang Bio

The main advantage of trading using opposite La Z and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Z position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.
La Z vs. Amazon Inc
The idea behind La-Z-Boy and Mustang Bio 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.
Mustang Bio vs. Yue Yuen Industrial
Mustang Bio vs. Tods Spa
Mustang Bio vs. Asics Corp
Mustang Bio vs. Timken Company
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go