Correlation Between Franklin Government and Lazard International
Can any of the company-specific risk be diversified away by investing in both Franklin Government 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 Franklin Government and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Lazard International Equity, you can compare the effects of market volatilities on Franklin Government 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 Franklin Government with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Lazard International.
Diversification Opportunities for Franklin Government and Lazard International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Lazard is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Franklin 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 Franklin Government Money 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 Franklin Government i.e., Franklin Government and Lazard International go up and down completely randomly.
Pair Corralation between Franklin Government and Lazard International
Assuming the 90 days horizon Franklin Government is expected to generate 2.44 times less return on investment than Lazard International. But when comparing it to its historical volatility, Franklin Government Money is 5.98 times less risky than Lazard International. It trades about 0.12 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,476 in Lazard International Equity on September 4, 2024 and sell it today you would earn a total of 265.00 from holding Lazard International Equity or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Franklin Government Money vs. Lazard International Equity
Performance |
| Timeline |
| Franklin Government Money |
| Lazard International |
Franklin Government and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Lazard International
The main advantage of trading using opposite Franklin Government and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government 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.| Franklin Government vs. Rbb Fund | Franklin Government vs. Issachar Fund Class | Franklin Government vs. Artisan Thematic Fund | Franklin Government vs. Vanguard Windsor Fund |
| Lazard International vs. Lazard Global Listed | Lazard International vs. Lazard Global Listed | Lazard International vs. Lazard International Pounders | Lazard International vs. Lazard Global Dynamic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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