Correlation Between Gmo Global and Lazard Equity
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Lazard Equity 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 Gmo Global and Lazard Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Lazard Equity Franchise, you can compare the effects of market volatilities on Gmo Global and Lazard Equity 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 Gmo Global with a short position of Lazard Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Lazard Equity.
Diversification Opportunities for Gmo Global and Lazard Equity
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gmo and Lazard is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Lazard Equity Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Equity Franchise and Gmo 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 Gmo Global Equity are associated (or correlated) with Lazard Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Equity Franchise has no effect on the direction of Gmo Global i.e., Gmo Global and Lazard Equity go up and down completely randomly.
Pair Corralation between Gmo Global and Lazard Equity
Assuming the 90 days horizon Gmo Global Equity is expected to generate 0.86 times more return on investment than Lazard Equity. However, Gmo Global Equity is 1.16 times less risky than Lazard Equity. It trades about 0.08 of its potential returns per unit of risk. Lazard Equity Franchise is currently generating about 0.0 per unit of risk. If you would invest 2,150 in Gmo Global Equity on December 5, 2024 and sell it today you would earn a total of 741.00 from holding Gmo Global Equity or generate 34.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Lazard Equity Franchise
Performance |
| Timeline |
| Gmo Global Equity |
| Lazard Equity Franchise |
Gmo Global and Lazard Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Lazard Equity
The main advantage of trading using opposite Gmo Global and Lazard Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Lazard Equity 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 Equity will offset losses from the drop in Lazard Equity's long position.| Gmo Global vs. Wilmington Diversified Income | ||
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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 CEOs Directory module to screen CEOs from public companies around the world.
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