Correlation Between Matson Money and Lazard Sustainable

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

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

Diversification Opportunities for Matson Money and Lazard Sustainable

0.81

Correlation Coefficient

Matson Money  Lazard Sustainable

Very poor diversification

The 3 months correlation between Matson and Lazard is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Lazard Sustainable Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Sustainable Equity and Matson Money 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 Matson Money Equity are associated (or correlated) with Lazard Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Sustainable Equity has no effect on the direction of Matson Money i.e., Matson Money and Lazard Sustainable go up and down completely randomly.

Pair Corralation between Matson Money and Lazard Sustainable

Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Lazard Sustainable. In addition to that, Matson Money is 1.03 times more volatile than Lazard Sustainable Equity. It trades about -0.07 of its total potential returns per unit of risk. Lazard Sustainable Equity is currently generating about 0.03 per unit of volatility. If you would invest  1,524  in Lazard Sustainable Equity on September 14, 2024 and sell it today you would earn a total of  6.00  from holding Lazard Sustainable Equity or generate 0.39% return on investment over 90 days.

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

Matson Money Equity  vs.  Lazard Sustainable Equity

Matson Money Equity

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matson Money Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Matson Money may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lazard Sustainable Equity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Sustainable Equity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matson Money and Lazard Sustainable

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

The idea behind Matson Money Equity and Lazard Sustainable 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.