Correlation Between Pace Municipal and Lazard Sustainable
Can any of the company-specific risk be diversified away by investing in both Pace Municipal and Lazard Sustainable 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 Municipal and Lazard Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Lazard Sustainable Equity, you can compare the effects of market volatilities on Pace Municipal and Lazard Sustainable 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 Municipal with a short position of Lazard Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Lazard Sustainable.
Diversification Opportunities for Pace Municipal and Lazard Sustainable
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pace and Lazard is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Lazard Sustainable Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Sustainable Equity and Pace 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 Pace Municipal Fixed are associated (or correlated) with Lazard Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Sustainable Equity has no effect on the direction of Pace Municipal i.e., Pace Municipal and Lazard Sustainable go up and down completely randomly.
Pair Corralation between Pace Municipal and Lazard Sustainable
Assuming the 90 days horizon Pace Municipal is expected to generate 1.52 times less return on investment than Lazard Sustainable. But when comparing it to its historical volatility, Pace Municipal Fixed is 2.98 times less risky than Lazard Sustainable. It trades about 0.06 of its potential returns per unit of risk. Lazard Sustainable Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,524 in Lazard Sustainable Equity on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Lazard Sustainable Equity or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Lazard Sustainable Equity
Performance |
| Timeline |
| Pace Municipal Fixed |
| Lazard Sustainable Equity |
Pace Municipal and Lazard Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Lazard Sustainable
The main advantage of trading using opposite Pace Municipal and Lazard Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal position performs unexpectedly, Lazard Sustainable 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 Sustainable will offset losses from the drop in Lazard Sustainable's long position.| Pace Municipal vs. Multisector Bond Sma | Pace Municipal vs. Franklin High Yield | Pace Municipal vs. Touchstone Premium Yield | Pace Municipal vs. Western Asset Municipal |
| Lazard Sustainable vs. Pace High Yield | Lazard Sustainable vs. Western Asset High | Lazard Sustainable vs. Ab Global Risk | Lazard Sustainable vs. Ppm High Yield |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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