Correlation Between Catalyst/smh High and Lazard Global
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High 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 Catalyst/smh High and Lazard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Lazard Global Dynamic, you can compare the effects of market volatilities on Catalyst/smh High 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 Catalyst/smh High with a short position of Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Lazard Global.
Diversification Opportunities for Catalyst/smh High and Lazard Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catalyst/smh and Lazard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Lazard Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Dynamic and Catalyst/smh High 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 Catalystsmh High Income 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 Dynamic has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Lazard Global go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Lazard Global
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 2.12 times more return on investment than Lazard Global. However, Catalyst/smh High is 2.12 times more volatile than Lazard Global Dynamic. It trades about 0.13 of its potential returns per unit of risk. Lazard Global Dynamic is currently generating about 0.01 per unit of risk. If you would invest 346.00 in Catalystsmh High Income on October 14, 2024 and sell it today you would earn a total of 23.00 from holding Catalystsmh High Income or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.24% |
| Values | Daily Returns |
Catalystsmh High Income vs. Lazard Global Dynamic
Performance |
| Timeline |
| Catalystsmh High Income |
| Lazard Global Dynamic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Catalyst/smh High and Lazard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Lazard Global
The main advantage of trading using opposite Catalyst/smh High and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High 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.The idea behind Catalystsmh High Income and Lazard Global Dynamic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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