Correlation Between Dunham Porategovernment and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment and Lazard Emerging 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 Dunham Porategovernment and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Lazard Emerging Markets, you can compare the effects of market volatilities on Dunham Porategovernment and Lazard Emerging 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 Dunham Porategovernment with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Lazard Emerging.
Diversification Opportunities for Dunham Porategovernment and Lazard Emerging
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and Lazard is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Dunham Porategovernment 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 Dunham Porategovernment Bond are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Lazard Emerging go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and Lazard Emerging
Assuming the 90 days horizon Dunham Porategovernment is expected to generate 2.62 times less return on investment than Lazard Emerging. But when comparing it to its historical volatility, Dunham Porategovernment Bond is 2.25 times less risky than Lazard Emerging. It trades about 0.05 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Lazard Emerging Markets on September 13, 2024 and sell it today you would earn a total of 67.00 from holding Lazard Emerging Markets or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 29.15% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Lazard Emerging Markets
Performance |
| Timeline |
| Dunham Porategovernment |
| Lazard Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dunham Porategovernment and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and Lazard Emerging
The main advantage of trading using opposite Dunham Porategovernment and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment position performs unexpectedly, Lazard Emerging 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 Emerging will offset losses from the drop in Lazard Emerging's long position.| Dunham Porategovernment vs. Ab Small Cap | Dunham Porategovernment vs. Vy Columbia Small | Dunham Porategovernment vs. Old Westbury Small | Dunham Porategovernment vs. Pace Smallmedium Value |
| Lazard Emerging vs. Inverse Government Long | Lazard Emerging vs. Elfun Government Money | Lazard Emerging vs. Dunham Porategovernment Bond | Lazard Emerging vs. Intermediate Government 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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