Correlation Between Real Return and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Real Return 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 Real Return and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Return Fund and Lazard Emerging Markets, you can compare the effects of market volatilities on Real Return 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 Real Return with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Return and Lazard Emerging.
Diversification Opportunities for Real Return and Lazard Emerging
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Real and Lazard is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Real Return Fund 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 Real Return 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 Real Return Fund 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 Real Return i.e., Real Return and Lazard Emerging go up and down completely randomly.
Pair Corralation between Real Return and Lazard Emerging
Assuming the 90 days horizon Real Return is expected to generate 4.19 times less return on investment than Lazard Emerging. But when comparing it to its historical volatility, Real Return Fund is 2.91 times less risky than Lazard Emerging. It trades about 0.05 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,658 in Lazard Emerging Markets on August 28, 2024 and sell it today you would earn a total of 232.00 from holding Lazard Emerging Markets or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Return Fund vs. Lazard Emerging Markets
Performance |
| Timeline |
| Real Return Fund |
| Lazard Emerging Markets |
Real Return and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Return and Lazard Emerging
The main advantage of trading using opposite Real Return and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Return 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.| Real Return vs. Pimco Rae Worldwide | Real Return vs. Pimco Rae Worldwide | Real Return vs. Pimco Rae Worldwide | Real Return vs. Pimco Rae Worldwide |
| Lazard Emerging vs. Ishares Municipal Bond | Lazard Emerging vs. Gamco Global Telecommunications | Lazard Emerging vs. Counterpoint Tactical Municipal | Lazard Emerging vs. Transamerica Intermediate Muni |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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