Correlation Between Sprott Gold and Lazard Equity
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Lazard Equity 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 Sprott Gold and Lazard Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Lazard Equity Franchise, you can compare the effects of market volatilities on Sprott Gold and Lazard Equity 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 Sprott Gold with a short position of Lazard Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Lazard Equity.
Diversification Opportunities for Sprott Gold and Lazard Equity
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sprott and Lazard is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Lazard Equity Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Equity Franchise and Sprott Gold 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 Sprott Gold Equity are associated (or correlated) with Lazard Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Equity Franchise has no effect on the direction of Sprott Gold i.e., Sprott Gold and Lazard Equity go up and down completely randomly.
Pair Corralation between Sprott Gold and Lazard Equity
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.73 times more return on investment than Lazard Equity. However, Sprott Gold is 1.73 times more volatile than Lazard Equity Franchise. It trades about 0.03 of its potential returns per unit of risk. Lazard Equity Franchise is currently generating about -0.02 per unit of risk. If you would invest 4,613 in Sprott Gold Equity on October 13, 2024 and sell it today you would earn a total of 852.00 from holding Sprott Gold Equity or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Lazard Equity Franchise
Performance |
| Timeline |
| Sprott Gold Equity |
| Lazard Equity Franchise |
Sprott Gold and Lazard Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Lazard Equity
The main advantage of trading using opposite Sprott Gold and Lazard Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Lazard Equity 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 Equity will offset losses from the drop in Lazard Equity's long position.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Lazard Equity vs. James Balanced Golden | Lazard Equity vs. Deutsche Gold Precious | Lazard Equity vs. International Investors Gold | Lazard Equity vs. Sprott Gold Equity |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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