Correlation Between Delaware Value and Lazard International

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

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

Diversification Opportunities for Delaware Value and Lazard International

-0.43

Correlation Coefficient

Delaware Value  Lazard International

Very good diversification

The 3 months correlation between Delaware and Lazard is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Value Fund and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Delaware 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 Delaware Value Fund are associated (or correlated) with Lazard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard International has no effect on the direction of Delaware Value i.e., Delaware Value and Lazard International go up and down completely randomly.

Pair Corralation between Delaware Value and Lazard International

Assuming the 90 days horizon Delaware Value Fund is expected to generate 0.86 times more return on investment than Lazard International. However, Delaware Value Fund is 1.16 times less risky than Lazard International. It trades about 0.14 of its potential returns per unit of risk. Lazard International Equity is currently generating about -0.07 per unit of risk. If you would invest  1,803  in Delaware Value Fund on September 5, 2024 and sell it today you would earn a total of  105.00  from holding Delaware Value Fund or generate 5.82% return on investment over 90 days.

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

Delaware Value Fund  vs.  Lazard International Equity

Delaware Value

Risk-Adjusted Performance

11 of 100

Good

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

Lazard International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Delaware Value and Lazard International

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

The idea behind Delaware Value Fund and Lazard International Equity 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.