Correlation Between Lazard Real and Lazard Emerging

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

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

Diversification Opportunities for Lazard Real and Lazard Emerging

0.63

Correlation Coefficient

Lazard Real  Lazard Emerging

Poor diversification

The 3 months correlation between Lazard and Lazard is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Real Assets and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Lazard Real 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 Real Assets are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Lazard Real i.e., Lazard Real and Lazard Emerging go up and down completely randomly.

Pair Corralation between Lazard Real and Lazard Emerging

Assuming the 90 days horizon Lazard Real Assets is expected to under-perform the Lazard Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lazard Real Assets is 1.76 times less risky than Lazard Emerging. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Lazard Emerging Markets is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,911  in Lazard Emerging Markets on September 15, 2024 and sell it today you would lose (7.00) from holding Lazard Emerging Markets or give up 0.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Lazard Real Assets  vs.  Lazard Emerging Markets

Lazard Real Assets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lazard Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Lazard Emerging 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 Real and Lazard Emerging

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

The idea behind Lazard Real Assets and Lazard Emerging Markets 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.