Correlation Between International Investors and Lazard Equity
Can any of the company-specific risk be diversified away by investing in both International Investors 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 International Investors and Lazard Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Lazard Equity Franchise, you can compare the effects of market volatilities on International Investors 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 International Investors with a short position of Lazard Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Lazard Equity.
Diversification Opportunities for International Investors and Lazard Equity
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Lazard is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold 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 International Investors 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 International Investors Gold 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 International Investors i.e., International Investors and Lazard Equity go up and down completely randomly.
Pair Corralation between International Investors and Lazard Equity
Assuming the 90 days horizon International Investors Gold is expected to generate 1.78 times more return on investment than Lazard Equity. However, International Investors is 1.78 times more volatile than Lazard Equity Franchise. It trades about 0.03 of its potential returns per unit of risk. Lazard Equity Franchise is currently generating about -0.02 per unit of risk. If you would invest 758.00 in International Investors Gold on October 13, 2024 and sell it today you would earn a total of 130.00 from holding International Investors Gold or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Lazard Equity Franchise
Performance |
| Timeline |
| International Investors |
| Lazard Equity Franchise |
International Investors and Lazard Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Lazard Equity
The main advantage of trading using opposite International Investors and Lazard Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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.| International Investors vs. Gamco Global Gold | International Investors vs. Gold And Precious | International Investors vs. Great West Goldman Sachs | International Investors vs. World Precious Minerals |
| Lazard Equity vs. James Balanced Golden | Lazard Equity vs. Deutsche Gold Precious | Lazard Equity vs. International Investors Gold | Lazard Equity vs. Sprott Gold Equity |
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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