Correlation Between Lazard Enhanced and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Lazard Enhanced and The Chesapeake 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 Enhanced and The Chesapeake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Enhanced Opportunities and The Chesapeake Growth, you can compare the effects of market volatilities on Lazard Enhanced and The Chesapeake 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 Enhanced with a short position of The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Enhanced and The Chesapeake.
Diversification Opportunities for Lazard Enhanced and The Chesapeake
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and The is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Enhanced Opportunities and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth and Lazard Enhanced 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 Enhanced Opportunities are associated (or correlated) with The Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Lazard Enhanced i.e., Lazard Enhanced and The Chesapeake go up and down completely randomly.
Pair Corralation between Lazard Enhanced and The Chesapeake
Assuming the 90 days horizon Lazard Enhanced is expected to generate 1.67 times less return on investment than The Chesapeake. But when comparing it to its historical volatility, Lazard Enhanced Opportunities is 4.84 times less risky than The Chesapeake. It trades about 0.2 of its potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,057 in The Chesapeake Growth on August 26, 2024 and sell it today you would earn a total of 1,271 from holding The Chesapeake Growth or generate 31.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard Enhanced Opportunities vs. The Chesapeake Growth
Performance |
| Timeline |
| Lazard Enhanced Oppo |
| Chesapeake Growth |
Lazard Enhanced and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Enhanced and The Chesapeake
The main advantage of trading using opposite Lazard Enhanced and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Enhanced position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Lazard Enhanced vs. Blackrock Inflation Protected | Lazard Enhanced vs. Ab Bond Inflation | Lazard Enhanced vs. Ab Municipal Bond | Lazard Enhanced vs. Ab Bond Inflation |
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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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