Correlation Between Digimarc and Lazard
Can any of the company-specific risk be diversified away by investing in both Digimarc and Lazard 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 Digimarc and Lazard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and Lazard, you can compare the effects of market volatilities on Digimarc and Lazard 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 Digimarc with a short position of Lazard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and Lazard.
Diversification Opportunities for Digimarc and Lazard
Poor diversification
The 3 months correlation between Digimarc and Lazard is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard and Digimarc 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 Digimarc are associated (or correlated) with Lazard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard has no effect on the direction of Digimarc i.e., Digimarc and Lazard go up and down completely randomly.
Pair Corralation between Digimarc and Lazard
Given the investment horizon of 90 days Digimarc is expected to generate 1.19 times more return on investment than Lazard. However, Digimarc is 1.19 times more volatile than Lazard. It trades about 0.17 of its potential returns per unit of risk. Lazard is currently generating about 0.13 per unit of risk. If you would invest 2,688 in Digimarc on August 29, 2024 and sell it today you would earn a total of 696.00 from holding Digimarc or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digimarc vs. Lazard
Performance |
| Timeline |
| Digimarc |
| Lazard |
Digimarc and Lazard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digimarc and Lazard
The main advantage of trading using opposite Digimarc and Lazard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, Lazard 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 will offset losses from the drop in Lazard's long position.The idea behind Digimarc and Lazard 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 vs. PJT Partners | Lazard vs. Moelis Co | Lazard vs. Houlihan Lokey | Lazard vs. Piper Sandler Companies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |