Correlation Between Lazard International and Cullen International
Can any of the company-specific risk be diversified away by investing in both Lazard International and Cullen International 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 International and Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard International Equity and Cullen International High, you can compare the effects of market volatilities on Lazard International and Cullen International 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 International with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Cullen International.
Diversification Opportunities for Lazard International and Cullen International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lazard and Cullen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Equity and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High and Lazard International 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 International Equity are associated (or correlated) with Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Lazard International i.e., Lazard International and Cullen International go up and down completely randomly.
Pair Corralation between Lazard International and Cullen International
Assuming the 90 days horizon Lazard International Equity is expected to generate 1.15 times more return on investment than Cullen International. However, Lazard International is 1.15 times more volatile than Cullen International High. It trades about -0.01 of its potential returns per unit of risk. Cullen International High is currently generating about -0.02 per unit of risk. If you would invest 1,134 in Lazard International Equity on September 10, 2024 and sell it today you would lose (8.00) from holding Lazard International Equity or give up 0.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Lazard International Equity vs. Cullen International High
Performance |
Timeline |
Lazard International |
Cullen International High |
Lazard International and Cullen International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lazard International and Cullen International
The main advantage of trading using opposite Lazard International and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International's long position.Lazard International vs. Lazard International Equity | Lazard International vs. Lazard International Small | Lazard International vs. Lazard Corporate Income | Lazard International vs. Lazard Strategic Equity |
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 CEOs Directory module to screen CEOs from public companies around the world.
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