Correlation Between Lazard Enhanced and Astor Long/short

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Can any of the company-specific risk be diversified away by investing in both Lazard Enhanced and Astor Long/short 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 Enhanced and Astor Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Enhanced Opportunities and Astor Longshort Fund, you can compare the effects of market volatilities on Lazard Enhanced and Astor Long/short 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 Enhanced with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Enhanced and Astor Long/short.

Diversification Opportunities for Lazard Enhanced and Astor Long/short

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between LAZARD and Astor is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Enhanced Opportunities and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Long/short and Lazard Enhanced 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 Enhanced Opportunities are associated (or correlated) with Astor Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Long/short has no effect on the direction of Lazard Enhanced i.e., Lazard Enhanced and Astor Long/short go up and down completely randomly.

Pair Corralation between Lazard Enhanced and Astor Long/short

Assuming the 90 days horizon Lazard Enhanced is expected to generate 2.44 times less return on investment than Astor Long/short. But when comparing it to its historical volatility, Lazard Enhanced Opportunities is 3.44 times less risky than Astor Long/short. It trades about 0.36 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,353  in Astor Longshort Fund on September 5, 2024 and sell it today you would earn a total of  77.00  from holding Astor Longshort Fund or generate 5.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.44%
ValuesDaily Returns

Lazard Enhanced Opportunities  vs.  Astor Longshort Fund

 Performance 
       Timeline  
Lazard Enhanced Oppo 

Risk-Adjusted Performance

28 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Enhanced Opportunities are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Lazard Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Astor Long/short 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Astor Long/short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Enhanced and Astor Long/short Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lazard Enhanced and Astor Long/short

The main advantage of trading using opposite Lazard Enhanced and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Enhanced position performs unexpectedly, Astor Long/short 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 Astor Long/short will offset losses from the drop in Astor Long/short's long position.
The idea behind Lazard Enhanced Opportunities and Astor Longshort Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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