Correlation Between Edgewood Growth and Lazard International
Can any of the company-specific risk be diversified away by investing in both Edgewood Growth 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 Edgewood Growth and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewood Growth Fund and Lazard International Strategic, you can compare the effects of market volatilities on Edgewood Growth 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 Edgewood Growth with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewood Growth and Lazard International.
Diversification Opportunities for Edgewood Growth and Lazard International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edgewood and Lazard is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Edgewood Growth Fund and Lazard International Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Edgewood Growth 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 Edgewood Growth Fund 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 Edgewood Growth i.e., Edgewood Growth and Lazard International go up and down completely randomly.
Pair Corralation between Edgewood Growth and Lazard International
Assuming the 90 days horizon Edgewood Growth Fund is expected to generate 1.18 times more return on investment than Lazard International. However, Edgewood Growth is 1.18 times more volatile than Lazard International Strategic. It trades about 0.35 of its potential returns per unit of risk. Lazard International Strategic is currently generating about 0.05 per unit of risk. If you would invest 5,077 in Edgewood Growth Fund on September 1, 2024 and sell it today you would earn a total of 339.00 from holding Edgewood Growth Fund or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edgewood Growth Fund vs. Lazard International Strategic
Performance |
| Timeline |
| Edgewood Growth |
| Lazard International |
Edgewood Growth and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewood Growth and Lazard International
The main advantage of trading using opposite Edgewood Growth and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewood Growth 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.| Edgewood Growth vs. John Hancock Disciplined | Edgewood Growth vs. Diamond Hill Large | Edgewood Growth vs. Hartford Schroders Emerging | Edgewood Growth vs. Oakmark International Fund |
| Lazard International vs. International Fund International | Lazard International vs. Small Cap Equity | Lazard International vs. Laudus Large Cap | Lazard International vs. Large Cap Growth |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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