Correlation Between Ford and Lazard Global
Can any of the company-specific risk be diversified away by investing in both Ford and Lazard Global 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 Ford and Lazard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Lazard Global Total, you can compare the effects of market volatilities on Ford and Lazard Global 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 Ford with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Lazard Global.
Diversification Opportunities for Ford and Lazard Global
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Lazard is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Lazard Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Total and Ford 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 Ford Motor are associated (or correlated) with Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Total has no effect on the direction of Ford i.e., Ford and Lazard Global go up and down completely randomly.
Pair Corralation between Ford and Lazard Global
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Lazard Global. In addition to that, Ford is 3.84 times more volatile than Lazard Global Total. It trades about -0.13 of its total potential returns per unit of risk. Lazard Global Total is currently generating about 0.4 per unit of volatility. If you would invest 1,602 in Lazard Global Total on November 18, 2024 and sell it today you would earn a total of 85.00 from holding Lazard Global Total or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Lazard Global Total
Performance |
| Timeline |
| Ford Motor |
| Lazard Global Total |
Ford and Lazard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Lazard Global
The main advantage of trading using opposite Ford and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Lazard Global 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 Global will offset losses from the drop in Lazard Global's long position.The idea behind Ford Motor and Lazard Global Total 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 Global vs. Cohen Steers Closed | Lazard Global vs. Abrdn Emerging Markets | Lazard Global vs. Allianzgi Equity Convertible | Lazard Global vs. Eaton Vance Senior |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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