Correlation Between Lazard International and Large Cap
Can any of the company-specific risk be diversified away by investing in both Lazard International and Large Cap 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 Large Cap 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 Large Cap E, you can compare the effects of market volatilities on Lazard International and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Large Cap.
Diversification Opportunities for Lazard International and Large Cap
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lazard and Large is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Strategic and Large Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap E 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap E has no effect on the direction of Lazard International i.e., Lazard International and Large Cap go up and down completely randomly.
Pair Corralation between Lazard International and Large Cap
Assuming the 90 days horizon Lazard International is expected to generate 1.91 times less return on investment than Large Cap. But when comparing it to its historical volatility, Lazard International Strategic is 1.03 times less risky than Large Cap. It trades about 0.04 of its potential returns per unit of risk. Large Cap E is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,966 in Large Cap E on August 29, 2024 and sell it today you would earn a total of 668.00 from holding Large Cap E or generate 33.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Strategic vs. Large Cap E
Performance |
| Timeline |
| Lazard International |
| Large Cap E |
Lazard International and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Large Cap
The main advantage of trading using opposite Lazard International and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap'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 |
| Large Cap vs. Dws Government Money | Large Cap vs. John Hancock Government | Large Cap vs. Prudential Government Income | Large Cap vs. Fidelity Series Government |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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