Correlation Between Dow Jones and Lazard Us
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Lazard Us 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 Dow Jones and Lazard Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Lazard Corporate Income, you can compare the effects of market volatilities on Dow Jones and Lazard Us 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 Dow Jones with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Lazard Us.
Diversification Opportunities for Dow Jones and Lazard Us
Very weak diversification
The 3 months correlation between Dow and Lazard is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Lazard Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Corporate Income and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Lazard Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Corporate Income has no effect on the direction of Dow Jones i.e., Dow Jones and Lazard Us go up and down completely randomly.
Pair Corralation between Dow Jones and Lazard Us
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.67 times more return on investment than Lazard Us. However, Dow Jones is 2.67 times more volatile than Lazard Corporate Income. It trades about 0.08 of its potential returns per unit of risk. Lazard Corporate Income is currently generating about 0.11 per unit of risk. If you would invest 3,389,102 in Dow Jones Industrial on October 28, 2024 and sell it today you would earn a total of 1,053,323 from holding Dow Jones Industrial or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Lazard Corporate Income
Performance |
| Timeline |
Dow Jones and Lazard Us Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Lazard Corporate Income
Pair trading matchups for Lazard Us
Pair Trading with Dow Jones and Lazard Us
The main advantage of trading using opposite Dow Jones and Lazard Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Lazard Us 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 Us will offset losses from the drop in Lazard Us' long position.| Dow Jones vs. Turning Point Brands | Dow Jones vs. Weyco Group | Dow Jones vs. Willamette Valley Vineyards | Dow Jones vs. Compania Cervecerias Unidas |
| Lazard Us vs. Tcw High Yield | Lazard Us vs. Pax High Yield | Lazard Us vs. High Yield Fund Investor | Lazard Us vs. Buffalo High Yield |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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