Correlation Between Jefferies Financial and Lazard
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Lazard 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 Jefferies Financial and Lazard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Lazard, you can compare the effects of market volatilities on Jefferies Financial and Lazard 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 Jefferies Financial with a short position of Lazard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Lazard.
Diversification Opportunities for Jefferies Financial and Lazard
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jefferies and Lazard is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard and Jefferies 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 Jefferies Financial Group are associated (or correlated) with Lazard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Lazard go up and down completely randomly.
Pair Corralation between Jefferies Financial and Lazard
Considering the 90-day investment horizon Jefferies Financial is expected to generate 1.26 times less return on investment than Lazard. In addition to that, Jefferies Financial is 1.18 times more volatile than Lazard. It trades about 0.03 of its total potential returns per unit of risk. Lazard is currently generating about 0.04 per unit of volatility. If you would invest 5,049 in Lazard on October 20, 2024 and sell it today you would earn a total of 66.00 from holding Lazard or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Lazard
Performance |
| Timeline |
| Jefferies Financial |
| Lazard |
Jefferies Financial and Lazard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Lazard
The main advantage of trading using opposite Jefferies Financial and Lazard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Lazard 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 will offset losses from the drop in Lazard's long position.| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
| Lazard vs. PJT Partners | Lazard vs. Moelis Co | Lazard vs. Houlihan Lokey | Lazard vs. Piper Sandler Companies |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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