Correlation Between Lazard Equity and Lazard Us

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

By analyzing existing cross correlation between Lazard Equity Franchise and Lazard Systematic Small, you can compare the effects of market volatilities on Lazard Equity and Lazard Us 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 Equity with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Equity and Lazard Us.

Diversification Opportunities for Lazard Equity and Lazard Us

-0.62

Correlation Coefficient

Lazard Equity  Lazard Us

Excellent diversification

The 3 months correlation between Lazard and Lazard is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Equity Franchise and Lazard Systematic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Systematic Small and Lazard Equity 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 Equity Franchise are associated (or correlated) with Lazard Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Systematic Small has no effect on the direction of Lazard Equity i.e., Lazard Equity and Lazard Us go up and down completely randomly.

Pair Corralation between Lazard Equity and Lazard Us

Assuming the 90 days horizon Lazard Equity Franchise is expected to under-perform the Lazard Us. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lazard Equity Franchise is 1.53 times less risky than Lazard Us. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Lazard Systematic Small is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,083  in Lazard Systematic Small on September 5, 2024 and sell it today you would earn a total of  137.00  from holding Lazard Systematic Small or generate 12.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Lazard Equity Franchise  vs.  Lazard Systematic Small

Lazard Equity Franchise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Equity Franchise has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lazard Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Systematic Small

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Systematic Small are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lazard Us may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lazard Equity and Lazard Us

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

The idea behind Lazard Equity Franchise and Lazard Systematic Small 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.