Correlation Between LPL Financial and Lazard
Can any of the company-specific risk be diversified away by investing in both LPL Financial and Lazard 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 LPL Financial and Lazard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPL Financial Holdings and Lazard, you can compare the effects of market volatilities on LPL Financial and Lazard 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 LPL Financial with a short position of Lazard. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPL Financial and Lazard.
Diversification Opportunities for LPL Financial and Lazard
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LPL and Lazard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard and LPL Financial 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 LPL Financial Holdings are associated (or correlated) with Lazard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard has no effect on the direction of LPL Financial i.e., LPL Financial and Lazard go up and down completely randomly.
Pair Corralation between LPL Financial and Lazard
Given the investment horizon of 90 days LPL Financial Holdings is expected to generate 0.8 times more return on investment than Lazard. However, LPL Financial Holdings is 1.25 times less risky than Lazard. It trades about 0.34 of its potential returns per unit of risk. Lazard is currently generating about 0.21 per unit of risk. If you would invest 26,405 in LPL Financial Holdings on August 28, 2024 and sell it today you would earn a total of 6,107 from holding LPL Financial Holdings or generate 23.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPL Financial Holdings vs. Lazard
Performance |
| Timeline |
| LPL Financial Holdings |
| Lazard |
LPL Financial and Lazard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPL Financial and Lazard
The main advantage of trading using opposite LPL Financial and Lazard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPL Financial position performs unexpectedly, Lazard 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 Lazard will offset losses from the drop in Lazard's long position.| LPL Financial vs. Tradeweb Markets | LPL Financial vs. Raymond James Financial | LPL Financial vs. PJT Partners | LPL Financial vs. Moelis Co |
| Lazard vs. PJT Partners | Lazard vs. Moelis Co | Lazard vs. Houlihan Lokey | Lazard 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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