Correlation Between Lazard International and Lazard Us

Can any of the company-specific risk be diversified away by investing in both Lazard International 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 International 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 International Strategic and Lazard Small Mid Cap, you can compare the effects of market volatilities on Lazard International 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 International with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Lazard Us.

Diversification Opportunities for Lazard International and Lazard Us

0.91

Correlation Coefficient

Lazard International  Lazard Us

Almost no diversification

The 3 months correlation between LAZARD and Lazard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Strategic and Lazard Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Small Mid 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 Strategic 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 Small Mid has no effect on the direction of Lazard International i.e., Lazard International and Lazard Us go up and down completely randomly.

Pair Corralation between Lazard International and Lazard Us

Assuming the 90 days horizon Lazard International Strategic is expected to generate 0.86 times more return on investment than Lazard Us. However, Lazard International Strategic is 1.16 times less risky than Lazard Us. It trades about -0.09 of its potential returns per unit of risk. Lazard Small Mid Cap is currently generating about -0.2 per unit of risk. If you would invest  1,575  in Lazard International Strategic on December 3, 2024 and sell it today you would lose (131.00) from holding Lazard International Strategic or give up 8.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Lazard International Strategic  vs.  Lazard Small Mid Cap

Lazard International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lazard International Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Lazard Small Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lazard Small Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Lazard International and Lazard Us

The main advantage of trading using opposite Lazard International and Lazard Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International 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 International Strategic and Lazard Small Mid Cap 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.