Correlation Between NYSE Composite and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lazard Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on NYSE Composite and Lazard Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lazard Emerging.
Diversification Opportunities for NYSE Composite and Lazard Emerging
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Lazard is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lazard Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Lazard Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.85 times more return on investment than Lazard Emerging. However, NYSE Composite is 1.17 times less risky than Lazard Emerging. It trades about 0.24 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about -0.28 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lazard Emerging Markets
Performance |
| Timeline |
NYSE Composite and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lazard Emerging Markets
Pair trading matchups for Lazard Emerging
Pair Trading with NYSE Composite and Lazard Emerging
The main advantage of trading using opposite NYSE Composite and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lazard Emerging 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 Emerging will offset losses from the drop in Lazard Emerging's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Lazard Emerging vs. Lazard Global Dynamic | Lazard Emerging vs. Lazard Global Dynamic | Lazard Emerging vs. Lazard International Quality | Lazard Emerging vs. Lazard Small Mid 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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