Correlation Between Transamerica Financial and Lazard Equity
Can any of the company-specific risk be diversified away by investing in both Transamerica Financial 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 Transamerica Financial and Lazard Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Financial Life and Lazard Equity Franchise, you can compare the effects of market volatilities on Transamerica Financial 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 Transamerica Financial with a short position of Lazard Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and Lazard Equity.
Diversification Opportunities for Transamerica Financial and Lazard Equity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transamerica and Lazard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life 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 Transamerica Financial 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 Transamerica Financial Life 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 Transamerica Financial i.e., Transamerica Financial and Lazard Equity go up and down completely randomly.
Pair Corralation between Transamerica Financial and Lazard Equity
Assuming the 90 days horizon Transamerica Financial Life is expected to generate 0.98 times more return on investment than Lazard Equity. However, Transamerica Financial Life is 1.02 times less risky than Lazard Equity. It trades about 0.01 of its potential returns per unit of risk. Lazard Equity Franchise is currently generating about -0.03 per unit of risk. If you would invest 1,053 in Transamerica Financial Life on October 16, 2024 and sell it today you would earn a total of 14.00 from holding Transamerica Financial Life or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Financial Life vs. Lazard Equity Franchise
Performance |
| Timeline |
| Transamerica Financial |
| Lazard Equity Franchise |
Transamerica Financial and Lazard Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Financial and Lazard Equity
The main advantage of trading using opposite Transamerica Financial and Lazard Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Financial 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.| Transamerica Financial vs. Pace High Yield | Transamerica Financial vs. Gmo High Yield | Transamerica Financial vs. Ab High Income | Transamerica Financial vs. Msift High Yield |
| Lazard Equity vs. Siit Emerging Markets | Lazard Equity vs. Delaware Limited Term Diversified | Lazard Equity vs. Inverse Emerging Markets | Lazard Equity vs. Artisan Developing World |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |