Correlation Between M Large and Lazard Funds
Can any of the company-specific risk be diversified away by investing in both M Large and Lazard Funds 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 M Large and Lazard Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and The Lazard Funds, you can compare the effects of market volatilities on M Large and Lazard Funds 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 M Large with a short position of Lazard Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Lazard Funds.
Diversification Opportunities for M Large and Lazard Funds
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MTCGX and Lazard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and The Lazard Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Funds and M Large 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 M Large Cap are associated (or correlated) with Lazard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Funds has no effect on the direction of M Large i.e., M Large and Lazard Funds go up and down completely randomly.
Pair Corralation between M Large and Lazard Funds
Assuming the 90 days horizon M Large Cap is expected to generate 2.19 times more return on investment than Lazard Funds. However, M Large is 2.19 times more volatile than The Lazard Funds. It trades about 0.09 of its potential returns per unit of risk. The Lazard Funds is currently generating about 0.07 per unit of risk. If you would invest 2,705 in M Large Cap on September 12, 2024 and sell it today you would earn a total of 1,024 from holding M Large Cap or generate 37.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Large Cap vs. The Lazard Funds
Performance |
| Timeline |
| M Large Cap |
| Lazard Funds |
M Large and Lazard Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Lazard Funds
The main advantage of trading using opposite M Large and Lazard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large position performs unexpectedly, Lazard Funds 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 Funds will offset losses from the drop in Lazard Funds' long position.| M Large vs. Vanguard Total Stock | M Large vs. Vanguard 500 Index | M Large vs. Vanguard Total Stock | M Large vs. Vanguard Total Stock |
| Lazard Funds vs. Qs Large Cap | Lazard Funds vs. Touchstone Large Cap | Lazard Funds vs. M Large Cap | Lazard Funds vs. Aqr Large Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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