Correlation Between Cambiar International and Lazard Capital

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

By analyzing existing cross correlation between Cambiar International Equity and Lazard Capital Allocator, you can compare the effects of market volatilities on Cambiar International and Lazard Capital 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 Cambiar International with a short position of Lazard Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and Lazard Capital.

Diversification Opportunities for Cambiar International and Lazard Capital

0.03

Correlation Coefficient

Cambiar International  Lazard Capital

Significant diversification

The 3 months correlation between Cambiar and Lazard is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity and Lazard Capital Allocator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Capital Allocator and Cambiar International 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 Cambiar International Equity are associated (or correlated) with Lazard Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Capital Allocator has no effect on the direction of Cambiar International i.e., Cambiar International and Lazard Capital go up and down completely randomly.

Pair Corralation between Cambiar International and Lazard Capital

Assuming the 90 days horizon Cambiar International Equity is expected to generate 0.87 times more return on investment than Lazard Capital. However, Cambiar International Equity is 1.15 times less risky than Lazard Capital. It trades about 0.21 of its potential returns per unit of risk. Lazard Capital Allocator is currently generating about -0.02 per unit of risk. If you would invest  2,585  in Cambiar International Equity on December 29, 2024 and sell it today you would earn a total of  260.00  from holding Cambiar International Equity or generate 10.06% return on investment over 90 days.

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

Cambiar International Equity  vs.  Lazard Capital Allocator

Cambiar International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cambiar International Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cambiar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lazard Capital Allocator

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lazard Capital Allocator has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lazard Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cambiar International and Lazard Capital

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

The idea behind Cambiar International Equity and Lazard Capital Allocator 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.