Correlation Between Lazard Global and Special Opportunities

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

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

Diversification Opportunities for Lazard Global and Special Opportunities

0.78

Correlation Coefficient

Lazard Global  Special Opportunities

Poor diversification

The 3 months correlation between Lazard and Special is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Global Total and Special Opportunities Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Special Opportunities and Lazard Global 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 Global Total are associated (or correlated) with Special Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Special Opportunities has no effect on the direction of Lazard Global i.e., Lazard Global and Special Opportunities go up and down completely randomly.

Pair Corralation between Lazard Global and Special Opportunities

Considering the 90-day investment horizon Lazard Global is expected to generate 13.24 times less return on investment than Special Opportunities. In addition to that, Lazard Global is 1.09 times more volatile than Special Opportunities Closed. It trades about 0.01 of its total potential returns per unit of risk. Special Opportunities Closed is currently generating about 0.13 per unit of volatility. If you would invest  1,427  in Special Opportunities Closed on December 28, 2024 and sell it today you would earn a total of  84.00  from holding Special Opportunities Closed or generate 5.89% return on investment over 90 days.

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

Lazard Global Total  vs.  Special Opportunities Closed

Lazard Global Total

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lazard Global Total has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong technical and fundamental indicators, Lazard Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Special Opportunities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Special Opportunities Closed are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Special Opportunities is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lazard Global and Special Opportunities

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

The idea behind Lazard Global Total and Special Opportunities Closed 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.