Correlation Between Lazard Small and Lazard Funds

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

Diversification Opportunities for Lazard Small and Lazard Funds

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Lazard and Lazard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Small Mid Cap and The Lazard Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Funds and Lazard Small 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 Small Mid Cap are associated (or correlated) with Lazard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Funds has no effect on the direction of Lazard Small i.e., Lazard Small and Lazard Funds go up and down completely randomly.

Pair Corralation between Lazard Small and Lazard Funds

Assuming the 90 days horizon Lazard Small is expected to generate 1.02 times less return on investment than Lazard Funds. In addition to that, Lazard Small is 1.1 times more volatile than The Lazard Funds. It trades about 0.19 of its total potential returns per unit of risk. The Lazard Funds is currently generating about 0.22 per unit of volatility. If you would invest  1,063  in The Lazard Funds on September 6, 2024 and sell it today you would earn a total of  158.00  from holding The Lazard Funds or generate 14.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Lazard Small Mid Cap  vs.  The Lazard Funds

 Performance 
       Timeline  
Lazard Small Mid 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Small Mid Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lazard Small showed solid returns over the last few months and may actually be approaching a breakup point.
Lazard Funds 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The Lazard Funds are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lazard Funds showed solid returns over the last few months and may actually be approaching a breakup point.

Lazard Small and Lazard Funds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lazard Small and Lazard Funds

The main advantage of trading using opposite Lazard Small and Lazard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Small position performs unexpectedly, Lazard Funds 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 Funds will offset losses from the drop in Lazard Funds' long position.
The idea behind Lazard Small Mid Cap and The Lazard Funds 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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