Correlation Between Lazard International and Iaadx

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

By analyzing existing cross correlation between Lazard International Compounders and Iaadx, you can compare the effects of market volatilities on Lazard International and Iaadx 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 Iaadx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Iaadx.

Diversification Opportunities for Lazard International and Iaadx

0.56

Correlation Coefficient

Lazard International  Iaadx

Very weak diversification

The 3 months correlation between Lazard and Iaadx is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Compounde and Iaadx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iaadx 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 Compounders are associated (or correlated) with Iaadx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iaadx has no effect on the direction of Lazard International i.e., Lazard International and Iaadx go up and down completely randomly.

Pair Corralation between Lazard International and Iaadx

Assuming the 90 days horizon Lazard International Compounders is expected to generate 3.79 times more return on investment than Iaadx. However, Lazard International is 3.79 times more volatile than Iaadx. It trades about 0.06 of its potential returns per unit of risk. Iaadx is currently generating about 0.21 per unit of risk. If you would invest  1,615  in Lazard International Compounders on December 25, 2024 and sell it today you would earn a total of  45.00  from holding Lazard International Compounders or generate 2.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Lazard International Compounde  vs.  Iaadx

Lazard International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard International Compounders are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Iaadx

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iaadx are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Iaadx 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 International and Iaadx

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

The idea behind Lazard International Compounders and Iaadx 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.