Correlation Between Cutler Equity and Lazard International
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Lazard International Compounders, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Lazard International.
Diversification Opportunities for Cutler Equity and Lazard International
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cutler and Lazard is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Lazard International Compounde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Cutler Equity 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 Cutler Equity 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 Cutler Equity i.e., Cutler Equity and Lazard International go up and down completely randomly.
Pair Corralation between Cutler Equity and Lazard International
Assuming the 90 days horizon Cutler Equity is expected to generate 0.77 times more return on investment than Lazard International. However, Cutler Equity is 1.3 times less risky than Lazard International. It trades about 0.08 of its potential returns per unit of risk. Lazard International Compounders is currently generating about 0.02 per unit of risk. If you would invest 2,874 in Cutler Equity on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Cutler Equity or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Lazard International Compounde
Performance |
| Timeline |
| Cutler Equity |
| Lazard International |
Cutler Equity and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Lazard International
The main advantage of trading using opposite Cutler Equity and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Ab Global Risk | Cutler Equity vs. Kinetics Global Fund | Cutler Equity vs. Siit Global Managed | Cutler Equity vs. Mirova Global Green |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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