Correlation Between Lazard Us and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Lazard Us and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Strategic Equity and Goldman Sachs Growth, you can compare the effects of market volatilities on Lazard Us and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Us and Goldman Sachs.
Diversification Opportunities for Lazard Us and Goldman Sachs
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lazard and GOLDMAN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Strategic Equity and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth 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 Strategic Equity are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Growth has no effect on the direction of Lazard Us i.e., Lazard Us and Goldman Sachs go up and down completely randomly.
Pair Corralation between Lazard Us and Goldman Sachs
Assuming the 90 days horizon Lazard Us is expected to generate 3.13 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Lazard Strategic Equity is 1.53 times less risky than Goldman Sachs. It trades about 0.25 of its potential returns per unit of risk. Goldman Sachs Growth is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 2,088 in Goldman Sachs Growth on September 5, 2024 and sell it today you would earn a total of 303.00 from holding Goldman Sachs Growth or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lazard Strategic Equity vs. Goldman Sachs Growth
Performance |
| Timeline |
| Lazard Strategic Equity |
| Goldman Sachs Growth |
Lazard Us and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Us and Goldman Sachs
The main advantage of trading using opposite Lazard Us and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Us position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Lazard Us vs. Goldman Sachs Growth | Lazard Us vs. Smallcap Growth Fund | Lazard Us vs. Ftfa Franklin Templeton Growth | Lazard Us vs. L Abbett Growth |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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