Correlation Between Lazard International and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Lazard International and Ep 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 Lazard International and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard International Equity and Ep Emerging Markets, you can compare the effects of market volatilities on Lazard International and Ep 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 Lazard International with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Ep Emerging.
Diversification Opportunities for Lazard International and Ep Emerging
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lazard and EPEIX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Equity and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Lazard International 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 Lazard International Equity are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Lazard International i.e., Lazard International and Ep Emerging go up and down completely randomly.
Pair Corralation between Lazard International and Ep Emerging
Assuming the 90 days horizon Lazard International Equity is expected to generate 1.03 times more return on investment than Ep Emerging. However, Lazard International is 1.03 times more volatile than Ep Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 951.00 in Lazard International Equity on September 4, 2024 and sell it today you would earn a total of 321.00 from holding Lazard International Equity or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Equity vs. Ep Emerging Markets
Performance |
| Timeline |
| Lazard International |
| Ep Emerging Markets |
Lazard International and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Ep Emerging
The main advantage of trading using opposite Lazard International and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Lazard International vs. Lazard Global Dynamic | Lazard International vs. Lazard Global Dynamic | Lazard International vs. Lazard International Quality | Lazard International vs. Lazard Small Mid Cap |
| Ep Emerging vs. Ep Emerging Markets | Ep Emerging vs. Europac International Bond | Ep Emerging vs. Europac International Dividend | Ep Emerging vs. Europac International Dividend |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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