Correlation Between Large Cap and Lazard Global
Can any of the company-specific risk be diversified away by investing in both Large Cap 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 Large Cap and Lazard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth and Lazard Global Listed, you can compare the effects of market volatilities on Large Cap 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 Large Cap with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Lazard Global.
Diversification Opportunities for Large Cap and Lazard Global
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Large and Lazard is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth and Lazard Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Listed and Large Cap 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 Large Cap Growth 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 Listed has no effect on the direction of Large Cap i.e., Large Cap and Lazard Global go up and down completely randomly.
Pair Corralation between Large Cap and Lazard Global
Assuming the 90 days horizon Large Cap Growth is expected to generate 1.44 times more return on investment than Lazard Global. However, Large Cap is 1.44 times more volatile than Lazard Global Listed. It trades about 0.05 of its potential returns per unit of risk. Lazard Global Listed is currently generating about 0.02 per unit of risk. If you would invest 2,877 in Large Cap Growth on August 26, 2024 and sell it today you would earn a total of 856.00 from holding Large Cap Growth or generate 29.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Growth vs. Lazard Global Listed
Performance |
| Timeline |
| Large Cap Growth |
| Lazard Global Listed |
Large Cap and Lazard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Lazard Global
The main advantage of trading using opposite Large Cap and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap 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.| Large Cap vs. Large Cap E | Large Cap vs. International Fund International | Large Cap vs. Parnassus Endeavor Fund | Large Cap vs. Parnassus E Equity |
| Lazard Global vs. International Fund International | Lazard Global vs. Lazard Global Listed | Lazard Global vs. Large Cap Growth | Lazard Global vs. The Value Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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