Correlation Between Lazard Equity and Lazard Us

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Can any of the company-specific risk be diversified away by investing in both Lazard Equity and Lazard Us 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 Equity and Lazard Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Equity Franchise and Lazard Sustainable Equity, you can compare the effects of market volatilities on Lazard Equity and Lazard Us 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 Equity with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Equity and Lazard Us.

Diversification Opportunities for Lazard Equity and Lazard Us

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Lazard and Lazard is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Equity Franchise and Lazard Sustainable Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Sustainable Equity and Lazard Equity 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 Equity Franchise are associated (or correlated) with Lazard Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Sustainable Equity has no effect on the direction of Lazard Equity i.e., Lazard Equity and Lazard Us go up and down completely randomly.

Pair Corralation between Lazard Equity and Lazard Us

Assuming the 90 days horizon Lazard Equity Franchise is expected to under-perform the Lazard Us. In addition to that, Lazard Equity is 1.18 times more volatile than Lazard Sustainable Equity. It trades about -0.03 of its total potential returns per unit of risk. Lazard Sustainable Equity is currently generating about 0.04 per unit of volatility. If you would invest  1,260  in Lazard Sustainable Equity on October 13, 2024 and sell it today you would earn a total of  172.00  from holding Lazard Sustainable Equity or generate 13.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Lazard Equity Franchise  vs.  Lazard Sustainable Equity

 Performance 
       Timeline  
Lazard Equity Franchise 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lazard Equity Franchise has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Lazard Sustainable Equity 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lazard Sustainable Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lazard Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Equity and Lazard Us Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lazard Equity and Lazard Us

The main advantage of trading using opposite Lazard Equity and Lazard Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Equity position performs unexpectedly, Lazard Us 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 Us will offset losses from the drop in Lazard Us' long position.
The idea behind Lazard Equity Franchise and Lazard Sustainable Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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