Correlation Between California High-yield and Lazard Enhanced
Can any of the company-specific risk be diversified away by investing in both California High-yield and Lazard Enhanced 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 California High-yield and Lazard Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Lazard Enhanced Opportunities, you can compare the effects of market volatilities on California High-yield and Lazard Enhanced 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 California High-yield with a short position of Lazard Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Lazard Enhanced.
Diversification Opportunities for California High-yield and Lazard Enhanced
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between California and Lazard is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Lazard Enhanced Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Enhanced Oppo and California High-yield 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 California High Yield Municipal are associated (or correlated) with Lazard Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Enhanced Oppo has no effect on the direction of California High-yield i.e., California High-yield and Lazard Enhanced go up and down completely randomly.
Pair Corralation between California High-yield and Lazard Enhanced
Assuming the 90 days horizon California High-yield is expected to generate 1.25 times less return on investment than Lazard Enhanced. In addition to that, California High-yield is 2.03 times more volatile than Lazard Enhanced Opportunities. It trades about 0.14 of its total potential returns per unit of risk. Lazard Enhanced Opportunities is currently generating about 0.34 per unit of volatility. If you would invest 824.00 in Lazard Enhanced Opportunities on August 26, 2024 and sell it today you would earn a total of 44.00 from holding Lazard Enhanced Opportunities or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Lazard Enhanced Opportunities
Performance |
| Timeline |
| California High Yield |
| Lazard Enhanced Oppo |
California High-yield and Lazard Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Lazard Enhanced
The main advantage of trading using opposite California High-yield and Lazard Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield position performs unexpectedly, Lazard Enhanced 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 Enhanced will offset losses from the drop in Lazard Enhanced's long position.| California High-yield vs. Rbc Microcap Value | California High-yield vs. Acm Dynamic Opportunity | California High-yield vs. Iaadx | California High-yield vs. Rbb Fund |
| Lazard Enhanced vs. California High Yield Municipal | Lazard Enhanced vs. Morningstar Municipal Bond | Lazard Enhanced vs. Dws Government Money | Lazard Enhanced vs. Ishares Municipal Bond |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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