Correlation Between Lazard Corporate and Lazard Equity

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

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

Diversification Opportunities for Lazard Corporate and Lazard Equity

0.03

Correlation Coefficient

Lazard Corporate  Lazard Equity

Significant diversification

The 3 months correlation between Lazard and Lazard is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Corporate Income and Lazard Equity Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Equity Franchise and Lazard Corporate 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 Corporate Income are associated (or correlated) with Lazard Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Equity Franchise has no effect on the direction of Lazard Corporate i.e., Lazard Corporate and Lazard Equity go up and down completely randomly.

Pair Corralation between Lazard Corporate and Lazard Equity

Assuming the 90 days horizon Lazard Corporate Income is expected to generate 0.24 times more return on investment than Lazard Equity. However, Lazard Corporate Income is 4.16 times less risky than Lazard Equity. It trades about 0.12 of its potential returns per unit of risk. Lazard Equity Franchise is currently generating about -0.05 per unit of risk. If you would invest  1,796  in Lazard Corporate Income on September 5, 2024 and sell it today you would earn a total of  23.00  from holding Lazard Corporate Income or generate 1.28% return on investment over 90 days.

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

Lazard Corporate Income  vs.  Lazard Equity Franchise

Lazard Corporate Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Corporate Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Corporate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 forward indicators, Lazard Equity 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 Corporate and Lazard Equity

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

The idea behind Lazard Corporate Income and Lazard Equity Franchise 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.