Correlation Between Black Oak and Lazard Us

Can any of the company-specific risk be diversified away by investing in both Black Oak and Lazard Us 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 Black Oak and Lazard Us into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Black Oak Emerging and Lazard Corporate Income, you can compare the effects of market volatilities on Black Oak and Lazard Us 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 Black Oak with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Lazard Us.

Diversification Opportunities for Black Oak and Lazard Us

0.36

Correlation Coefficient

Black Oak  Lazard Us

Weak diversification

The 3 months correlation between Black and Lazard is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Lazard Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Corporate Income and Black Oak 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 Black Oak Emerging are associated (or correlated) with Lazard Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Corporate Income has no effect on the direction of Black Oak i.e., Black Oak and Lazard Us go up and down completely randomly.

Pair Corralation between Black Oak and Lazard Us

Assuming the 90 days horizon Black Oak Emerging is expected to under-perform the Lazard Us. In addition to that, Black Oak is 9.14 times more volatile than Lazard Corporate Income. It trades about -0.26 of its total potential returns per unit of risk. Lazard Corporate Income is currently generating about -0.16 per unit of volatility. If you would invest  1,815  in Lazard Corporate Income on October 7, 2024 and sell it today you would lose (14.00) from holding Lazard Corporate Income or give up 0.77% of portfolio value over 90 days.

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

Black Oak Emerging  vs.  Lazard Corporate Income

Black Oak Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Oak Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Lazard Corporate Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Corporate Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Black Oak and Lazard Us

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

The idea behind Black Oak Emerging and Lazard Corporate Income 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.