Correlation Between Intermediate Government and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Intermediate Government 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 Intermediate Government and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Government Bond and Lazard Emerging Markets, you can compare the effects of market volatilities on Intermediate Government 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 Intermediate Government with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Government and Lazard Emerging.
Diversification Opportunities for Intermediate Government and Lazard Emerging
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Intermediate and Lazard is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Government 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 Intermediate Government 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 Intermediate Government 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 Intermediate Government i.e., Intermediate Government and Lazard Emerging go up and down completely randomly.
Pair Corralation between Intermediate Government and Lazard Emerging
If you would invest 946.00 in Intermediate Government Bond on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Intermediate Government Bond or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Intermediate Government Bond vs. Lazard Emerging Markets
Performance |
| Timeline |
| Intermediate Government |
| Lazard Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intermediate Government and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Government and Lazard Emerging
The main advantage of trading using opposite Intermediate Government and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Government 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.The idea behind Intermediate Government Bond and Lazard Emerging Markets 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 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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