Correlation Between Lazard Us and Hennessy
Can any of the company-specific risk be diversified away by investing in both Lazard Us and Hennessy 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 Us and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Small Mid Cap and Hennessy Bp Energy, you can compare the effects of market volatilities on Lazard Us and Hennessy 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 Us with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Us and Hennessy.
Diversification Opportunities for Lazard Us and Hennessy
Poor diversification
The 3 months correlation between Lazard and Hennessy is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Small Mid Cap and Hennessy Bp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Energy and Lazard Us 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 Small Mid Cap are associated (or correlated) with Hennessy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Bp Energy has no effect on the direction of Lazard Us i.e., Lazard Us and Hennessy go up and down completely randomly.
Pair Corralation between Lazard Us and Hennessy
Assuming the 90 days horizon Lazard Us is expected to generate 1.85 times less return on investment than Hennessy. But when comparing it to its historical volatility, Lazard Small Mid Cap is 1.05 times less risky than Hennessy. It trades about 0.04 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,178 in Hennessy Bp Energy on August 31, 2024 and sell it today you would earn a total of 681.00 from holding Hennessy Bp Energy or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard Small Mid Cap vs. Hennessy Bp Energy
Performance |
| Timeline |
| Lazard Small Mid |
| Hennessy Bp Energy |
Lazard Us and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Us and Hennessy
The main advantage of trading using opposite Lazard Us and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Us position performs unexpectedly, Hennessy 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 Hennessy will offset losses from the drop in Hennessy's long position.| Lazard Us vs. Vanguard Small Cap Index | Lazard Us vs. T Rowe Price | Lazard Us vs. HUMANA INC | Lazard Us vs. SCOR PK |
| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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