Correlation Between Lazard International and Parametric Emerging
Can any of the company-specific risk be diversified away by investing in both Lazard International and Parametric Emerging 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 Parametric Emerging 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 Parametric Emerging Markets, you can compare the effects of market volatilities on Lazard International and Parametric Emerging 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 Parametric Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Parametric Emerging.
Diversification Opportunities for Lazard International and Parametric Emerging
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lazard and Parametric is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Strategic and Parametric Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Emerging 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 Parametric Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Emerging has no effect on the direction of Lazard International i.e., Lazard International and Parametric Emerging go up and down completely randomly.
Pair Corralation between Lazard International and Parametric Emerging
Assuming the 90 days horizon Lazard International Strategic is expected to generate 1.42 times more return on investment than Parametric Emerging. However, Lazard International is 1.42 times more volatile than Parametric Emerging Markets. It trades about 0.2 of its potential returns per unit of risk. Parametric Emerging Markets is currently generating about 0.22 per unit of risk. If you would invest 1,421 in Lazard International Strategic on November 28, 2024 and sell it today you would earn a total of 42.00 from holding Lazard International Strategic or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Strategic vs. Parametric Emerging Markets
Performance |
| Timeline |
| Lazard International |
| Parametric Emerging |
Lazard International and Parametric Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Parametric Emerging
The main advantage of trading using opposite Lazard International and Parametric Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Parametric Emerging 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 Parametric Emerging will offset losses from the drop in Parametric Emerging'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 |
| Parametric Emerging vs. Baron Emerging Markets | Parametric Emerging vs. Lazard International Strategic | Parametric Emerging vs. Aqr Diversified Arbitrage | Parametric Emerging vs. Touchstone Sands Capital |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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