Correlation Between Lazard Enhanced and Heartland Value

Can any of the company-specific risk be diversified away by investing in both Lazard Enhanced and Heartland Value 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 Heartland Value 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 Heartland Value Fund, you can compare the effects of market volatilities on Lazard Enhanced and Heartland Value 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 Heartland Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Enhanced and Heartland Value.

Diversification Opportunities for Lazard Enhanced and Heartland Value

-0.7

Correlation Coefficient

Lazard Enhanced  Heartland Value

Excellent diversification

The 3 months correlation between Lazard and Heartland is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Enhanced Opportunities and Heartland Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value 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 Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value has no effect on the direction of Lazard Enhanced i.e., Lazard Enhanced and Heartland Value go up and down completely randomly.

Pair Corralation between Lazard Enhanced and Heartland Value

Assuming the 90 days horizon Lazard Enhanced Opportunities is expected to generate 0.13 times more return on investment than Heartland Value. However, Lazard Enhanced Opportunities is 7.88 times less risky than Heartland Value. It trades about 0.53 of its potential returns per unit of risk. Heartland Value Fund is currently generating about -0.05 per unit of risk. If you would invest  854.00  in Lazard Enhanced Opportunities on December 27, 2024 and sell it today you would earn a total of  40.00  from holding Lazard Enhanced Opportunities or generate 4.68% return on investment over 90 days.

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

Lazard Enhanced Opportunities  vs.  Heartland Value Fund

Lazard Enhanced Oppo

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Enhanced Opportunities are ranked lower than 41 (%) 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.

Heartland Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartland Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Heartland Value 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 Enhanced and Heartland Value

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

The idea behind Lazard Enhanced Opportunities and Heartland Value 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.