Correlation Between Lazard and Houlihan Lokey
Can any of the company-specific risk be diversified away by investing in both Lazard and Houlihan Lokey 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 and Houlihan Lokey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard and Houlihan Lokey, you can compare the effects of market volatilities on Lazard and Houlihan Lokey 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 with a short position of Houlihan Lokey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard and Houlihan Lokey.
Diversification Opportunities for Lazard and Houlihan Lokey
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lazard and Houlihan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lazard and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey and Lazard 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 are associated (or correlated) with Houlihan Lokey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houlihan Lokey has no effect on the direction of Lazard i.e., Lazard and Houlihan Lokey go up and down completely randomly.
Pair Corralation between Lazard and Houlihan Lokey
Considering the 90-day investment horizon Lazard is expected to generate 1.54 times more return on investment than Houlihan Lokey. However, Lazard is 1.54 times more volatile than Houlihan Lokey. It trades about 0.2 of its potential returns per unit of risk. Houlihan Lokey is currently generating about -0.05 per unit of risk. If you would invest 5,067 in Lazard on November 18, 2024 and sell it today you would earn a total of 457.00 from holding Lazard or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard vs. Houlihan Lokey
Performance |
| Timeline |
| Lazard |
| Houlihan Lokey |
Lazard and Houlihan Lokey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard and Houlihan Lokey
The main advantage of trading using opposite Lazard and Houlihan Lokey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard position performs unexpectedly, Houlihan Lokey 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 Houlihan Lokey will offset losses from the drop in Houlihan Lokey's long position.| Lazard vs. PJT Partners | Lazard vs. Moelis Co | Lazard vs. Houlihan Lokey | Lazard vs. Piper Sandler Companies |
| Houlihan Lokey vs. Lazard | Houlihan Lokey vs. PJT Partners | Houlihan Lokey vs. Moelis Co | Houlihan Lokey 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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