Correlation Between Qs Global and Lazard Capital

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

By analyzing existing cross correlation between Qs Global Equity and Lazard Capital Allocator, you can compare the effects of market volatilities on Qs Global and Lazard Capital 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 Qs Global with a short position of Lazard Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Global and Lazard Capital.

Diversification Opportunities for Qs Global and Lazard Capital

0.91

Correlation Coefficient

Qs Global  Lazard Capital

Almost no diversification

The 3 months correlation between SMYIX and Lazard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Qs Global Equity and Lazard Capital Allocator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Capital Allocator and Qs Global 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 Qs Global Equity are associated (or correlated) with Lazard Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Capital Allocator has no effect on the direction of Qs Global i.e., Qs Global and Lazard Capital go up and down completely randomly.

Pair Corralation between Qs Global and Lazard Capital

Assuming the 90 days horizon Qs Global Equity is expected to under-perform the Lazard Capital. In addition to that, Qs Global is 1.16 times more volatile than Lazard Capital Allocator. It trades about -0.01 of its total potential returns per unit of risk. Lazard Capital Allocator is currently generating about 0.02 per unit of volatility. If you would invest  1,024  in Lazard Capital Allocator on December 28, 2024 and sell it today you would earn a total of  6.00  from holding Lazard Capital Allocator or generate 0.59% return on investment over 90 days.

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

Qs Global Equity  vs.  Lazard Capital Allocator

Qs Global Equity

Risk-Adjusted Performance

Very Weak

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

Lazard Capital Allocator

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Capital Allocator are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Lazard Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qs Global and Lazard Capital

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

The idea behind Qs Global Equity and Lazard Capital Allocator 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.