Correlation Between Lazard International and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Lazard International and Harding Loevner 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 Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard International Strategic and Harding Loevner International, you can compare the effects of market volatilities on Lazard International and Harding Loevner 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 Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Harding Loevner.
Diversification Opportunities for Lazard International and Harding Loevner
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Harding is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Strategic and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte 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 Strategic are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of Lazard International i.e., Lazard International and Harding Loevner go up and down completely randomly.
Pair Corralation between Lazard International and Harding Loevner
Assuming the 90 days horizon Lazard International Strategic is expected to generate 0.86 times more return on investment than Harding Loevner. However, Lazard International Strategic is 1.17 times less risky than Harding Loevner. It trades about -0.13 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.18 per unit of risk. If you would invest 1,586 in Lazard International Strategic on August 26, 2024 and sell it today you would lose (34.00) from holding Lazard International Strategic or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Strategic vs. Harding Loevner International
Performance |
| Timeline |
| Lazard International |
| Harding Loevner Inte |
Lazard International and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Harding Loevner
The main advantage of trading using opposite Lazard International and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| Lazard International vs. International Fund International | Lazard International vs. Small Cap Equity | Lazard International vs. Laudus Large Cap | Lazard International vs. Large Cap Growth |
| Harding Loevner vs. Lazard International Strategic | Harding Loevner vs. Delaware Value Fund | Harding Loevner vs. American Beacon International | Harding Loevner vs. Hartford Schroders Emerging |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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