Correlation Between Simt Multi and Lazard Funds

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

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

Diversification Opportunities for Simt Multi and Lazard Funds

-0.48

Correlation Coefficient

Simt Multi  Lazard Funds

Very good diversification

The 3 months correlation between Simt and Lazard is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and The Lazard Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Funds and Simt Multi 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 Simt Multi Asset Inflation 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 Simt Multi i.e., Simt Multi and Lazard Funds go up and down completely randomly.

Pair Corralation between Simt Multi and Lazard Funds

Assuming the 90 days horizon Simt Multi is expected to generate 6.53 times less return on investment than Lazard Funds. But when comparing it to its historical volatility, Simt Multi Asset Inflation is 2.16 times less risky than Lazard Funds. It trades about 0.02 of its potential returns per unit of risk. The Lazard Funds is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  950.00  in The Lazard Funds on September 16, 2024 and sell it today you would earn a total of  193.00  from holding The Lazard Funds or generate 20.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Simt Multi Asset Inflation  vs.  The Lazard Funds

Simt Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simt Multi Asset Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Simt Multi 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

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Lazard Funds are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Multi and Lazard Funds

The main advantage of trading using opposite Simt Multi and Lazard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi 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 Simt Multi Asset Inflation 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.