Correlation Between Lazard Real and Capital Income
Can any of the company-specific risk be diversified away by investing in both Lazard Real and Capital Income 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 Lazard Real and Capital Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Real Assets and Capital Income Builder, you can compare the effects of market volatilities on Lazard Real and Capital Income 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 Lazard Real with a short position of Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Real and Capital Income.
Diversification Opportunities for Lazard Real and Capital Income
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Capital is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Real Assets and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder and Lazard Real 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 Lazard Real Assets are associated (or correlated) with Capital Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Lazard Real i.e., Lazard Real and Capital Income go up and down completely randomly.
Pair Corralation between Lazard Real and Capital Income
Assuming the 90 days horizon Lazard Real Assets is expected to generate 1.44 times more return on investment than Capital Income. However, Lazard Real is 1.44 times more volatile than Capital Income Builder. It trades about 0.07 of its potential returns per unit of risk. Capital Income Builder is currently generating about 0.04 per unit of risk. If you would invest 1,029 in Lazard Real Assets on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Lazard Real Assets or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard Real Assets vs. Capital Income Builder
Performance |
| Timeline |
| Lazard Real Assets |
| Capital Income Builder |
Lazard Real and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Real and Capital Income
The main advantage of trading using opposite Lazard Real and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Real position performs unexpectedly, Capital Income 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 Capital Income will offset losses from the drop in Capital Income's long position.| Lazard Real vs. Ms Global Fixed | Lazard Real vs. Artisan Select Equity | Lazard Real vs. Scharf Fund Retail | Lazard Real vs. Balanced Fund Retail |
| Capital Income vs. Income Fund Of | Capital Income vs. American Funds 2015 | Capital Income vs. New World Fund | Capital Income vs. American Mutual Fund |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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