Correlation Between Lazard Us and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Lazard Us and Legg Mason 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 Us and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard Sustainable Equity and Legg Mason Global, you can compare the effects of market volatilities on Lazard Us and Legg Mason 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 Us with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Us and Legg Mason.
Diversification Opportunities for Lazard Us and Legg Mason
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lazard and Legg is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Sustainable Equity and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Global and Lazard Us 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 Sustainable Equity are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Global has no effect on the direction of Lazard Us i.e., Lazard Us and Legg Mason go up and down completely randomly.
Pair Corralation between Lazard Us and Legg Mason
Assuming the 90 days horizon Lazard Sustainable Equity is expected to generate 3.6 times more return on investment than Legg Mason. However, Lazard Us is 3.6 times more volatile than Legg Mason Global. It trades about 0.07 of its potential returns per unit of risk. Legg Mason Global is currently generating about 0.14 per unit of risk. If you would invest 1,464 in Lazard Sustainable Equity on October 23, 2024 and sell it today you would earn a total of 14.00 from holding Lazard Sustainable Equity or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard Sustainable Equity vs. Legg Mason Global
Performance |
| Timeline |
| Lazard Sustainable Equity |
| Legg Mason Global |
Lazard Us and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard Us and Legg Mason
The main advantage of trading using opposite Lazard Us and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Us position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Lazard Us vs. Legg Mason Global | Lazard Us vs. Dreyfusstandish Global Fixed | Lazard Us vs. Wisdomtree Siegel Global | Lazard Us vs. Alliancebernstein Global Highome |
| Legg Mason vs. First Trust Specialty | Legg Mason vs. John Hancock Financial | Legg Mason vs. 1919 Financial Services | Legg Mason vs. Financials Ultrasector Profund |
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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