Correlation Between Ford and Lazard Us
Can any of the company-specific risk be diversified away by investing in both Ford and Lazard Us 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 Us 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 Small Mid Cap, you can compare the effects of market volatilities on Ford and Lazard Us 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 Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Lazard Us.
Diversification Opportunities for Ford and Lazard Us
Poor diversification
The 3 months correlation between Ford and Lazard is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Lazard Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Small Mid 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 Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Small Mid has no effect on the direction of Ford i.e., Ford and Lazard Us go up and down completely randomly.
Pair Corralation between Ford and Lazard Us
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Lazard Us. In addition to that, Ford is 1.93 times more volatile than Lazard Small Mid Cap. It trades about 0.0 of its total potential returns per unit of risk. Lazard Small Mid Cap is currently generating about 0.04 per unit of volatility. If you would invest 1,240 in Lazard Small Mid Cap on August 31, 2024 and sell it today you would earn a total of 182.00 from holding Lazard Small Mid Cap or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ford Motor vs. Lazard Small Mid Cap
Performance |
| Timeline |
| Ford Motor |
| Lazard Small Mid |
Ford and Lazard Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Lazard Us
The main advantage of trading using opposite Ford and Lazard Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Lazard Us 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 Us will offset losses from the drop in Lazard Us' long position.The idea behind Ford Motor and Lazard Small Mid Cap 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 Us vs. Vanguard Small Cap Index | Lazard Us vs. T Rowe Price | Lazard Us vs. HUMANA INC | Lazard Us vs. SCOR PK |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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