Correlation Between Lazard Us and Lazard Capital

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

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

Diversification Opportunities for Lazard Us and Lazard Capital

-0.41

Correlation Coefficient

Lazard Us  Lazard Capital

Very good diversification

The 3 months correlation between LAZARD and Lazard is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Short Duration 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 Lazard Us 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 Short Duration 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 Lazard Us i.e., Lazard Us and Lazard Capital go up and down completely randomly.

Pair Corralation between Lazard Us and Lazard Capital

Assuming the 90 days horizon Lazard Short Duration is expected to under-perform the Lazard Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lazard Short Duration is 5.43 times less risky than Lazard Capital. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Lazard Capital Allocator is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,052  in Lazard Capital Allocator on September 11, 2024 and sell it today you would earn a total of  77.00  from holding Lazard Capital Allocator or generate 7.32% return on investment over 90 days.

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

Lazard Short Duration  vs.  Lazard Capital Allocator

Lazard Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lazard Us 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

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Capital Allocator are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lazard Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lazard Us and Lazard Capital

The main advantage of trading using opposite Lazard Us and Lazard Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Us 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 Lazard Short Duration 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 Anywhere module to track or share privately all of your investments from the convenience of any device.