Correlation Between Amazon and Lazard Global
Can any of the company-specific risk be diversified away by investing in both Amazon and Lazard Global 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 Amazon and Lazard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Lazard Global Equity, you can compare the effects of market volatilities on Amazon and Lazard Global 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 Amazon with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Lazard Global.
Diversification Opportunities for Amazon and Lazard Global
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amazon and Lazard is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Lazard Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Equity and Amazon 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 Amazon Inc are associated (or correlated) with Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Equity has no effect on the direction of Amazon i.e., Amazon and Lazard Global go up and down completely randomly.
Pair Corralation between Amazon and Lazard Global
Given the investment horizon of 90 days Amazon Inc is expected to generate 3.19 times more return on investment than Lazard Global. However, Amazon is 3.19 times more volatile than Lazard Global Equity. It trades about 0.19 of its potential returns per unit of risk. Lazard Global Equity is currently generating about 0.23 per unit of risk. If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Lazard Global Equity
Performance |
| Timeline |
| Amazon Inc |
| Lazard Global Equity |
Amazon and Lazard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Lazard Global
The main advantage of trading using opposite Amazon and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Lazard Global 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 Global will offset losses from the drop in Lazard Global's long position.The idea behind Amazon Inc and Lazard Global Equity 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.| Lazard Global vs. Lazard Global Dynamic | Lazard Global vs. Lazard Global Dynamic | Lazard Global vs. Lazard International Quality | Lazard Global vs. Lazard Small Mid Cap |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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