Correlation Between Lazard Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Lazard Global and Western Asset 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 Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Global Equity and Western Asset Total, you can compare the effects of market volatilities on Lazard Global and Western Asset 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Global and Western Asset.
Diversification Opportunities for Lazard Global and Western Asset
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LAZARD and Western is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Global Equity and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total and Lazard Global 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 Global Equity are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Total has no effect on the direction of Lazard Global i.e., Lazard Global and Western Asset go up and down completely randomly.
Pair Corralation between Lazard Global and Western Asset
Assuming the 90 days horizon Lazard Global Equity is expected to generate 3.65 times more return on investment than Western Asset. However, Lazard Global is 3.65 times more volatile than Western Asset Total. It trades about 0.06 of its potential returns per unit of risk. Western Asset Total is currently generating about 0.16 per unit of risk. If you would invest 1,880 in Lazard Global Equity on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Lazard Global Equity or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard Global Equity vs. Western Asset Total
Performance |
| Timeline |
| Lazard Global Equity |
| Western Asset Total |
Lazard Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Global and Western Asset
The main advantage of trading using opposite Lazard Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Lazard Global vs. Western Asset Total | Lazard Global vs. Prudential Jennison Equity | Lazard Global vs. Oppenheimer Developing Markets | Lazard Global vs. Aquagold International |
| Western Asset vs. Pro Blend Moderate Term | Western Asset vs. Target Retirement 2040 | Western Asset vs. Franklin Lifesmart Retirement | Western Asset vs. Fidelity Managed Retirement |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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