Correlation Between Lazard International and Invesco Energy
Can any of the company-specific risk be diversified away by investing in both Lazard International and Invesco Energy 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 Invesco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard International Small and Invesco Energy Fund, you can compare the effects of market volatilities on Lazard International and Invesco Energy 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 Invesco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Invesco Energy.
Diversification Opportunities for Lazard International and Invesco Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lazard and Invesco is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Small and Invesco Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Energy 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 Small are associated (or correlated) with Invesco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Energy has no effect on the direction of Lazard International i.e., Lazard International and Invesco Energy go up and down completely randomly.
Pair Corralation between Lazard International and Invesco Energy
Assuming the 90 days horizon Lazard International is expected to generate 4.21 times less return on investment than Invesco Energy. But when comparing it to its historical volatility, Lazard International Small is 1.26 times less risky than Invesco Energy. It trades about 0.01 of its potential returns per unit of risk. Invesco Energy Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,261 in Invesco Energy Fund on September 12, 2024 and sell it today you would earn a total of 292.00 from holding Invesco Energy Fund or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Lazard International Small vs. Invesco Energy Fund
Performance |
| Timeline |
| Lazard International |
| Invesco Energy |
Lazard International and Invesco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Invesco Energy
The main advantage of trading using opposite Lazard International and Invesco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Invesco Energy 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 Invesco Energy will offset losses from the drop in Invesco Energy's long position.| Lazard International vs. Invesco Energy Fund | Lazard International vs. Thrivent Natural Resources | Lazard International vs. Dreyfus Natural Resources | Lazard International vs. Hennessy Bp Energy |
| Invesco Energy vs. Vanguard Energy Fund | Invesco Energy vs. Vanguard Energy Index | Invesco Energy vs. Fidelity Select Portfolios | Invesco Energy vs. Fidelity Advisor Energy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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