Correlation Between Us Government and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Us Government and Lazard Emerging 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 Us Government and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Plus and Lazard Emerging Markets, you can compare the effects of market volatilities on Us Government and Lazard Emerging 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 Us Government with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Lazard Emerging.
Diversification Opportunities for Us Government and Lazard Emerging
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GVPIX and Lazard is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Plus and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Us 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 Us Government Plus are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Us Government i.e., Us Government and Lazard Emerging go up and down completely randomly.
Pair Corralation between Us Government and Lazard Emerging
Assuming the 90 days horizon Us Government Plus is expected to generate 1.4 times more return on investment than Lazard Emerging. However, Us Government is 1.4 times more volatile than Lazard Emerging Markets. It trades about -0.01 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about -0.03 per unit of risk. If you would invest 3,487 in Us Government Plus on September 12, 2024 and sell it today you would lose (14.00) from holding Us Government Plus or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Plus vs. Lazard Emerging Markets
Performance |
| Timeline |
| Us Government Plus |
| Lazard Emerging Markets |
Us Government and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Lazard Emerging
The main advantage of trading using opposite Us Government and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Lazard Emerging 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 Emerging will offset losses from the drop in Lazard Emerging's long position.| Us Government vs. SCOR PK | Us Government vs. Morningstar Unconstrained Allocation | Us Government vs. Via Renewables | Us Government vs. Bondbloxx ETF Trust |
| Lazard Emerging vs. Rational Strategic Allocation | Lazard Emerging vs. Touchstone Large Cap | Lazard Emerging vs. T Rowe Price | Lazard Emerging vs. Alternative Asset Allocation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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