Correlation Between Lazard International and Lazard Real
Can any of the company-specific risk be diversified away by investing in both Lazard International and Lazard Real 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 Lazard Real 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 Lazard Real Assets, you can compare the effects of market volatilities on Lazard International and Lazard Real 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 Lazard Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Lazard Real.
Diversification Opportunities for Lazard International and Lazard Real
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Lazard is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Equity and Lazard Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Real Assets 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 Lazard Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Real Assets has no effect on the direction of Lazard International i.e., Lazard International and Lazard Real go up and down completely randomly.
Pair Corralation between Lazard International and Lazard Real
Assuming the 90 days horizon Lazard International Equity is expected to generate 1.3 times more return on investment than Lazard Real. However, Lazard International is 1.3 times more volatile than Lazard Real Assets. It trades about 0.37 of its potential returns per unit of risk. Lazard Real Assets is currently generating about 0.25 per unit of risk. If you would invest 1,178 in Lazard International Equity on November 2, 2024 and sell it today you would earn a total of 64.00 from holding Lazard International Equity or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Equity vs. Lazard Real Assets
Performance |
| Timeline |
| Lazard International |
| Lazard Real Assets |
Lazard International and Lazard Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Lazard Real
The main advantage of trading using opposite Lazard International and Lazard Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Lazard Real 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 Real will offset losses from the drop in Lazard Real's long position.| Lazard International vs. Lazard Small Mid Cap | Lazard International vs. Lazard Equity Franchise | Lazard International vs. Lazard Emerging Markets | Lazard International vs. Lazard International Equity |
| Lazard Real vs. Morgan Stanley Emerging | Lazard Real vs. Growth Strategy Fund | Lazard Real vs. Pimco Moditiesplus Strategy | Lazard Real vs. Balanced Strategy Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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