Correlation Between Lazard International and Tocqueville International
Can any of the company-specific risk be diversified away by investing in both Lazard International and Tocqueville International 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 Tocqueville International 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 The Tocqueville International, you can compare the effects of market volatilities on Lazard International and Tocqueville International 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 Tocqueville International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Tocqueville International.
Diversification Opportunities for Lazard International and Tocqueville International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Tocqueville is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Small and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville International 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 Tocqueville International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville International has no effect on the direction of Lazard International i.e., Lazard International and Tocqueville International go up and down completely randomly.
Pair Corralation between Lazard International and Tocqueville International
Assuming the 90 days horizon Lazard International Small is expected to generate 1.0 times more return on investment than Tocqueville International. However, Lazard International Small is 1.0 times less risky than Tocqueville International. It trades about 0.08 of its potential returns per unit of risk. The Tocqueville International is currently generating about -0.13 per unit of risk. If you would invest 795.00 in Lazard International Small on October 23, 2024 and sell it today you would earn a total of 8.00 from holding Lazard International Small or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard International Small vs. The Tocqueville International
Performance |
| Timeline |
| Lazard International |
| Tocqueville International |
Lazard International and Tocqueville International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard International and Tocqueville International
The main advantage of trading using opposite Lazard International and Tocqueville International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Tocqueville International 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 Tocqueville International will offset losses from the drop in Tocqueville International's long position.| Lazard International vs. Ssga International Stock | Lazard International vs. Schwab Small Cap Equity | Lazard International vs. Schwab Large Cap Growth | Lazard International vs. Harding Loevner Emerging |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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