Correlation Between Moderately Aggressive and Lazard International
Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderately Aggressive Balanced and Lazard International Equity, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Lazard International.
Diversification Opportunities for Moderately Aggressive and Lazard International
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Moderately and Lazard is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Moderately Aggressive 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Lazard International go up and down completely randomly.
Pair Corralation between Moderately Aggressive and Lazard International
Assuming the 90 days horizon Moderately Aggressive Balanced is expected to generate 0.73 times more return on investment than Lazard International. However, Moderately Aggressive Balanced is 1.37 times less risky than Lazard International. It trades about 0.1 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.03 per unit of risk. If you would invest 1,019 in Moderately Aggressive Balanced on August 31, 2024 and sell it today you would earn a total of 228.00 from holding Moderately Aggressive Balanced or generate 22.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderately Aggressive Balanced vs. Lazard International Equity
Performance |
| Timeline |
| Moderately Aggressive |
| Lazard International |
Moderately Aggressive and Lazard International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderately Aggressive and Lazard International
The main advantage of trading using opposite Moderately Aggressive and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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.| Moderately Aggressive vs. American Funds American | Moderately Aggressive vs. American Funds American | Moderately Aggressive vs. American Balanced | Moderately Aggressive vs. American Balanced 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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