Correlation Between Ares Dynamic and Lazard Global
Can any of the company-specific risk be diversified away by investing in both Ares Dynamic and Lazard Global 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 Ares Dynamic and Lazard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Dynamic Credit and Lazard Global Total, you can compare the effects of market volatilities on Ares Dynamic and Lazard Global 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 Ares Dynamic with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Dynamic and Lazard Global.
Diversification Opportunities for Ares Dynamic and Lazard Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and Lazard is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ares Dynamic Credit and Lazard Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Total and Ares Dynamic 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 Ares Dynamic Credit are associated (or correlated) with Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Total has no effect on the direction of Ares Dynamic i.e., Ares Dynamic and Lazard Global go up and down completely randomly.
Pair Corralation between Ares Dynamic and Lazard Global
Given the investment horizon of 90 days Ares Dynamic Credit is expected to under-perform the Lazard Global. But the fund apears to be less risky and, when comparing its historical volatility, Ares Dynamic Credit is 1.2 times less risky than Lazard Global. The fund trades about -0.11 of its potential returns per unit of risk. The Lazard Global Total is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,644 in Lazard Global Total on December 2, 2024 and sell it today you would lose (4.00) from holding Lazard Global Total or give up 0.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ares Dynamic Credit vs. Lazard Global Total
Performance |
Timeline |
Ares Dynamic Credit |
Lazard Global Total |
Ares Dynamic and Lazard Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ares Dynamic and Lazard Global
The main advantage of trading using opposite Ares Dynamic and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Dynamic position performs unexpectedly, Lazard Global 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 Global will offset losses from the drop in Lazard Global's long position.Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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