Correlation Between Pace International and Lazard International
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Lazard International Equity, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Lazard International.
Diversification Opportunities for Pace International and Lazard International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PACE and Lazard is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Pace International 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 Pace International Emerging 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 Pace International i.e., Pace International and Lazard International go up and down completely randomly.
Pair Corralation between Pace International and Lazard International
Assuming the 90 days horizon Pace International Emerging is expected to generate 1.13 times more return on investment than Lazard International. However, Pace International is 1.13 times more volatile than Lazard International Equity. It trades about 0.03 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.0 per unit of risk. If you would invest 1,303 in Pace International Emerging on September 3, 2024 and sell it today you would earn a total of 32.00 from holding Pace International Emerging or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Lazard International Equity
Performance |
| Timeline |
| Pace International |
| Lazard International |
Pace International and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Lazard International
The main advantage of trading using opposite Pace International and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.| Pace International vs. Kinetics Market Opportunities | Pace International vs. Rbc Emerging Markets | Pace International vs. Barings Emerging Markets | Pace International vs. Artisan Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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