Correlation Between Lazard Capital and Lazard Emerging

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

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

Diversification Opportunities for Lazard Capital and Lazard Emerging

-0.39

Correlation Coefficient

Lazard Capital  Lazard Emerging

Very good diversification

The 3 months correlation between Lazard and Lazard is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Capital Allocator and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Lazard Capital 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 Capital Allocator are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Lazard Capital i.e., Lazard Capital and Lazard Emerging go up and down completely randomly.

Pair Corralation between Lazard Capital and Lazard Emerging

Assuming the 90 days horizon Lazard Capital Allocator is expected to generate 0.88 times more return on investment than Lazard Emerging. However, Lazard Capital Allocator is 1.13 times less risky than Lazard Emerging. It trades about 0.17 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.11 per unit of risk. If you would invest  1,100  in Lazard Capital Allocator on September 15, 2024 and sell it today you would earn a total of  21.00  from holding Lazard Capital Allocator or generate 1.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Lazard Capital Allocator  vs.  Lazard Emerging Markets

Lazard Capital Allocator

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Capital Allocator are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.

Lazard Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lazard Capital and Lazard Emerging

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

The idea behind Lazard Capital Allocator and Lazard Emerging Markets 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.