Correlation Between Victory Rs and Lazard Funds

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

By analyzing existing cross correlation between Victory Rs Partners and The Lazard Funds, you can compare the effects of market volatilities on Victory Rs and Lazard Funds 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 Victory Rs with a short position of Lazard Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Rs and Lazard Funds.

Diversification Opportunities for Victory Rs and Lazard Funds

0.96

Correlation Coefficient

Victory Rs  Lazard Funds

Almost no diversification

The 3 months correlation between Victory and Lazard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Victory Rs Partners and The Lazard Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Funds and Victory Rs 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 Victory Rs Partners are associated (or correlated) with Lazard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Funds has no effect on the direction of Victory Rs i.e., Victory Rs and Lazard Funds go up and down completely randomly.

Pair Corralation between Victory Rs and Lazard Funds

Assuming the 90 days horizon Victory Rs Partners is expected to generate 0.89 times more return on investment than Lazard Funds. However, Victory Rs Partners is 1.13 times less risky than Lazard Funds. It trades about -0.05 of its potential returns per unit of risk. The Lazard Funds is currently generating about -0.11 per unit of risk. If you would invest  2,358  in Victory Rs Partners on December 21, 2024 and sell it today you would lose (74.00) from holding Victory Rs Partners or give up 3.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Victory Rs Partners  vs.  The Lazard Funds

Victory Rs Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Rs Partners has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Victory Rs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Funds

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Victory Rs and Lazard Funds

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

The idea behind Victory Rs Partners and The Lazard Funds 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.