Correlation Between Harding Loevner and Lazard International
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Lazard International 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 Harding Loevner and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Emerging and Lazard International Small, you can compare the effects of market volatilities on Harding Loevner and Lazard International 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 Harding Loevner with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Lazard International.
Diversification Opportunities for Harding Loevner and Lazard International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harding and Lazard is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Emerging and Lazard International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Harding Loevner 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 Harding Loevner Emerging are associated (or correlated) with Lazard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard International has no effect on the direction of Harding Loevner i.e., Harding Loevner and Lazard International go up and down completely randomly.
Pair Corralation between Harding Loevner and Lazard International
Assuming the 90 days horizon Harding Loevner is expected to generate 2.43 times less return on investment than Lazard International. But when comparing it to its historical volatility, Harding Loevner Emerging is 1.1 times less risky than Lazard International. It trades about 0.13 of its potential returns per unit of risk. Lazard International Small is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 793.00 in Lazard International Small on November 3, 2024 and sell it today you would earn a total of 41.00 from holding Lazard International Small or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Emerging vs. Lazard International Small
Performance |
| Timeline |
| Harding Loevner Emerging |
| Lazard International |
Harding Loevner and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Lazard International
The main advantage of trading using opposite Harding Loevner and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Lazard International 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 International will offset losses from the drop in Lazard International's long position.| Harding Loevner vs. Ssga International Stock | Harding Loevner vs. Schwab E Equity | Harding Loevner vs. Driehaus Emerging Markets | Harding Loevner vs. Columbia Emerging Markets |
| Lazard International vs. Ssga International Stock | Lazard International vs. Schwab Small Cap Equity | Lazard International vs. Schwab Large Cap Growth | Lazard International vs. Harding Loevner Emerging |
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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