Correlation Between NYSE Composite and Lazard Enhanced
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lazard Enhanced 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 NYSE Composite and Lazard Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lazard Enhanced Opportunities, you can compare the effects of market volatilities on NYSE Composite and Lazard Enhanced 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 NYSE Composite with a short position of Lazard Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lazard Enhanced.
Diversification Opportunities for NYSE Composite and Lazard Enhanced
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Lazard is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lazard Enhanced Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Enhanced Oppo and NYSE Composite 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 NYSE Composite are associated (or correlated) with Lazard Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Enhanced Oppo has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lazard Enhanced go up and down completely randomly.
Pair Corralation between NYSE Composite and Lazard Enhanced
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.01 times more return on investment than Lazard Enhanced. However, NYSE Composite is 7.01 times more volatile than Lazard Enhanced Opportunities. It trades about 0.27 of its potential returns per unit of risk. Lazard Enhanced Opportunities is currently generating about 0.51 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lazard Enhanced Opportunities
Performance |
| Timeline |
NYSE Composite and Lazard Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lazard Enhanced Opportunities
Pair trading matchups for Lazard Enhanced
Pair Trading with NYSE Composite and Lazard Enhanced
The main advantage of trading using opposite NYSE Composite and Lazard Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lazard Enhanced 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 Enhanced will offset losses from the drop in Lazard Enhanced's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Lazard Enhanced vs. Touchstone Large Cap | Lazard Enhanced vs. Upright Assets Allocation | Lazard Enhanced vs. Hartford Moderate Allocation | Lazard Enhanced vs. Pace Large Growth |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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