Correlation Between The Value and Lazard Global

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

By analyzing existing cross correlation between The Value Fund and Lazard Global Listed, you can compare the effects of market volatilities on The Value 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 The Value with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Value and Lazard Global.

Diversification Opportunities for The Value and Lazard Global

0.42

Correlation Coefficient

The Value  Lazard Global

Very weak diversification

The 3 months correlation between The and Lazard is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Value Fund and Lazard Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Listed and The Value 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 The Value Fund 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 Listed has no effect on the direction of The Value i.e., The Value and Lazard Global go up and down completely randomly.

Pair Corralation between The Value and Lazard Global

Assuming the 90 days horizon The Value is expected to generate 4.51 times less return on investment than Lazard Global. In addition to that, The Value is 1.38 times more volatile than Lazard Global Listed. It trades about 0.02 of its total potential returns per unit of risk. Lazard Global Listed is currently generating about 0.14 per unit of volatility. If you would invest  1,564  in Lazard Global Listed on December 28, 2024 and sell it today you would earn a total of  77.00  from holding Lazard Global Listed or generate 4.92% return on investment over 90 days.

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

The Value Fund  vs.  Lazard Global Listed

Value Fund

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Value Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, The Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Global Listed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Global Listed are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with The Value and Lazard Global

The main advantage of trading using opposite The Value and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Value 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.

The idea behind The Value Fund and Lazard Global Listed 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.