Correlation Between Oklahoma Municipal and Lazard International
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal and Lazard 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 Oklahoma Municipal and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma Municipal Fund and Lazard International Equity, you can compare the effects of market volatilities on Oklahoma Municipal and Lazard 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 Oklahoma Municipal with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Lazard International.
Diversification Opportunities for Oklahoma Municipal and Lazard International
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oklahoma and Lazard is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Oklahoma Municipal 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 Oklahoma Municipal Fund are associated (or correlated) with Lazard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard International has no effect on the direction of Oklahoma Municipal i.e., Oklahoma Municipal and Lazard International go up and down completely randomly.
Pair Corralation between Oklahoma Municipal and Lazard International
Assuming the 90 days horizon Oklahoma Municipal is expected to generate 9.19 times less return on investment than Lazard International. But when comparing it to its historical volatility, Oklahoma Municipal Fund is 3.38 times less risky than Lazard International. It trades about 0.02 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,573 in Lazard International Equity on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Lazard International Equity or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma Municipal Fund vs. Lazard International Equity
Performance |
| Timeline |
| Oklahoma Municipal |
| Lazard International |
Oklahoma Municipal and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma Municipal and Lazard International
The main advantage of trading using opposite Oklahoma Municipal and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal position performs unexpectedly, Lazard 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 Lazard International will offset losses from the drop in Lazard International's long position.| Oklahoma Municipal vs. Aig Government Money | Oklahoma Municipal vs. Ridgeworth Seix Government | Oklahoma Municipal vs. Elfun Government Money | Oklahoma Municipal vs. Goldman Sachs Government |
| Lazard International vs. Gamco Global Telecommunications | Lazard International vs. Oklahoma Municipal Fund | Lazard International vs. T Rowe Price | Lazard International vs. Ishares Municipal Bond |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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