Correlation Between Applied Finance and Lazard International
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Lazard International 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 Applied Finance and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Lazard International Equity, you can compare the effects of market volatilities on Applied Finance and Lazard International 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 Applied Finance with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Lazard International.
Diversification Opportunities for Applied Finance and Lazard International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Lazard is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Lazard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard International has no effect on the direction of Applied Finance i.e., Applied Finance and Lazard International go up and down completely randomly.
Pair Corralation between Applied Finance and Lazard International
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 2.0 times more return on investment than Lazard International. However, Applied Finance is 2.0 times more volatile than Lazard International Equity. It trades about 0.05 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.05 per unit of risk. If you would invest 1,657 in Applied Finance Explorer on September 12, 2024 and sell it today you would earn a total of 699.00 from holding Applied Finance Explorer or generate 42.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Lazard International Equity
Performance |
| Timeline |
| Applied Finance Explorer |
| Lazard International |
Applied Finance and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Lazard International
The main advantage of trading using opposite Applied Finance and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Lazard International 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 International will offset losses from the drop in Lazard International's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Lazard International vs. Applied Finance Explorer | Lazard International vs. Lord Abbett Small | Lazard International vs. Valic Company I | Lazard International vs. Vanguard Small Cap Value |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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