Correlation Between Touchstone Premium and Lazard Real

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

By analyzing existing cross correlation between Touchstone Premium Yield and Lazard Real Assets, you can compare the effects of market volatilities on Touchstone Premium and Lazard Real 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 Touchstone Premium with a short position of Lazard Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Premium and Lazard Real.

Diversification Opportunities for Touchstone Premium and Lazard Real

0.51

Correlation Coefficient

Touchstone Premium  Lazard Real

Very weak diversification

The 3 months correlation between Touchstone and Lazard is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Premium Yield and Lazard Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Real Assets and Touchstone Premium 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 Touchstone Premium Yield are associated (or correlated) with Lazard Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Real Assets has no effect on the direction of Touchstone Premium i.e., Touchstone Premium and Lazard Real go up and down completely randomly.

Pair Corralation between Touchstone Premium and Lazard Real

Assuming the 90 days horizon Touchstone Premium Yield is expected to under-perform the Lazard Real. In addition to that, Touchstone Premium is 2.43 times more volatile than Lazard Real Assets. It trades about -0.05 of its total potential returns per unit of risk. Lazard Real Assets is currently generating about -0.05 per unit of volatility. If you would invest  1,054  in Lazard Real Assets on September 14, 2024 and sell it today you would lose (18.00) from holding Lazard Real Assets or give up 1.71% of portfolio value over 90 days.

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

Touchstone Premium Yield  vs.  Lazard Real Assets

Touchstone Premium Yield

Risk-Adjusted Performance

0 of 100

Modest

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

Lazard Real Assets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Touchstone Premium and Lazard Real

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

The idea behind Touchstone Premium Yield and Lazard Real Assets 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.