Correlation Between Lazard Emerging and Adams Diversified
Can any of the company-specific risk be diversified away by investing in both Lazard Emerging and Adams Diversified 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 Lazard Emerging and Adams Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Emerging Markets and Adams Diversified Equity, you can compare the effects of market volatilities on Lazard Emerging and Adams Diversified 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 Lazard Emerging with a short position of Adams Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Emerging and Adams Diversified.
Diversification Opportunities for Lazard Emerging and Adams Diversified
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Adams is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Emerging Markets and Adams Diversified Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Diversified Equity and Lazard Emerging 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 Lazard Emerging Markets are associated (or correlated) with Adams Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Diversified Equity has no effect on the direction of Lazard Emerging i.e., Lazard Emerging and Adams Diversified go up and down completely randomly.
Pair Corralation between Lazard Emerging and Adams Diversified
Assuming the 90 days horizon Lazard Emerging is expected to generate 2.2 times less return on investment than Adams Diversified. But when comparing it to its historical volatility, Lazard Emerging Markets is 1.19 times less risky than Adams Diversified. It trades about 0.07 of its potential returns per unit of risk. Adams Diversified Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,221 in Adams Diversified Equity on September 5, 2024 and sell it today you would earn a total of 845.00 from holding Adams Diversified Equity or generate 69.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.3% |
| Values | Daily Returns |
Lazard Emerging Markets vs. Adams Diversified Equity
Performance |
| Timeline |
| Lazard Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Adams Diversified Equity |
Lazard Emerging and Adams Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Emerging and Adams Diversified
The main advantage of trading using opposite Lazard Emerging and Adams Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Emerging position performs unexpectedly, Adams Diversified 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 Adams Diversified will offset losses from the drop in Adams Diversified's long position.| Lazard Emerging vs. Lord Abbett Inflation | Lazard Emerging vs. Inflation Protected Bond Fund | Lazard Emerging vs. Arrow Managed Futures | Lazard Emerging vs. Blackrock Inflation Protected |
| Adams Diversified vs. Tri Continental Closed | Adams Diversified vs. SRH Total Return | Adams Diversified vs. Putnam Municipal Opportunities | Adams Diversified vs. Tortoise Energy Independence |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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