Correlation Between Us Government and Lazard Us
Can any of the company-specific risk be diversified away by investing in both Us Government and Lazard Us 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 Us Government and Lazard Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Lazard Systematic Small, you can compare the effects of market volatilities on Us Government and Lazard Us 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 Us Government with a short position of Lazard Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Lazard Us.
Diversification Opportunities for Us Government and Lazard Us
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USGFX and Lazard is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Lazard Systematic Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Systematic Small and Us Government 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 Us Government Securities are associated (or correlated) with Lazard Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Systematic Small has no effect on the direction of Us Government i.e., Us Government and Lazard Us go up and down completely randomly.
Pair Corralation between Us Government and Lazard Us
Assuming the 90 days horizon Us Government is expected to generate 20.87 times less return on investment than Lazard Us. But when comparing it to its historical volatility, Us Government Securities is 4.29 times less risky than Lazard Us. It trades about 0.06 of its potential returns per unit of risk. Lazard Systematic Small is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Lazard Systematic Small on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Lazard Systematic Small or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Lazard Systematic Small
Performance |
| Timeline |
| Us Government Securities |
| Lazard Systematic Small |
Us Government and Lazard Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Lazard Us
The main advantage of trading using opposite Us Government and Lazard Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Lazard Us 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 Us will offset losses from the drop in Lazard Us' long position.| Us Government vs. Government Securities Fund | Us Government vs. John Hancock Government | Us Government vs. Short Term Government Fund | Us Government vs. Blackrock Government Bond |
| Lazard Us vs. Us Government Securities | Lazard Us vs. Us Government Plus | Lazard Us vs. Us Government Securities | Lazard Us vs. Aig Government Money |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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