Correlation Between Lazard and Blackstone

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

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

Diversification Opportunities for Lazard and Blackstone

0.9

Correlation Coefficient

Lazard  Blackstone

Almost no diversification

The 3 months correlation between Lazard and Blackstone is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lazard and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Lazard 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 Lazard are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Lazard i.e., Lazard and Blackstone go up and down completely randomly.

Pair Corralation between Lazard and Blackstone

Considering the 90-day investment horizon Lazard is expected to generate 1.6 times less return on investment than Blackstone. In addition to that, Lazard is 1.5 times more volatile than Blackstone Group. It trades about 0.1 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.25 per unit of volatility. If you would invest  14,575  in Blackstone Group on September 12, 2024 and sell it today you would earn a total of  4,382  from holding Blackstone Group or generate 30.07% return on investment over 90 days.

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

Lazard  vs.  Blackstone Group

Lazard

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Lazard showed solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lazard and Blackstone

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

The idea behind Lazard and Blackstone Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.