Correlation Between Lazard Enhanced and Palmer Square

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

Diversification Opportunities for Lazard Enhanced and Palmer Square

0.8

Correlation Coefficient

Lazard Enhanced  Palmer Square

Very poor diversification

The 3 months correlation between Lazard and Palmer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Enhanced Opportunities and Palmer Square Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palmer Square Income 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 Palmer Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palmer Square Income has no effect on the direction of Lazard Enhanced i.e., Lazard Enhanced and Palmer Square go up and down completely randomly.

Pair Corralation between Lazard Enhanced and Palmer Square

Assuming the 90 days horizon Lazard Enhanced Opportunities is expected to generate 0.84 times more return on investment than Palmer Square. However, Lazard Enhanced Opportunities is 1.19 times less risky than Palmer Square. It trades about 0.51 of its potential returns per unit of risk. Palmer Square Income is currently generating about 0.01 per unit of risk. If you would invest  854.00  in Lazard Enhanced Opportunities on December 26, 2024 and sell it today you would earn a total of  37.00  from holding Lazard Enhanced Opportunities or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Lazard Enhanced Opportunities  vs.  Palmer Square Income

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 39 (%) 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.

Palmer Square Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Palmer Square Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Palmer Square 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 Palmer Square

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

The idea behind Lazard Enhanced Opportunities and Palmer Square Income 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .