Correlation Between Lazard Funds and Lazard International

Can any of the company-specific risk be diversified away by investing in both Lazard Funds 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 Lazard Funds and Lazard International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Lazard Funds and Lazard International Small, you can compare the effects of market volatilities on Lazard Funds 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 Lazard Funds with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Funds and Lazard International.

Diversification Opportunities for Lazard Funds and Lazard International

-0.73

Correlation Coefficient

Lazard Funds  Lazard International

Pay attention - limited upside

The 3 months correlation between Lazard and Lazard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Lazard Funds and Lazard International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Lazard Funds 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 The Lazard Funds 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 Lazard Funds i.e., Lazard Funds and Lazard International go up and down completely randomly.

Pair Corralation between Lazard Funds and Lazard International

Assuming the 90 days horizon The Lazard Funds is expected to generate 0.83 times more return on investment than Lazard International. However, The Lazard Funds is 1.21 times less risky than Lazard International. It trades about 0.16 of its potential returns per unit of risk. Lazard International Small is currently generating about 0.12 per unit of risk. If you would invest  1,129  in The Lazard Funds on September 13, 2024 and sell it today you would earn a total of  20.00  from holding The Lazard Funds or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Lazard Funds  vs.  Lazard International Small

Lazard Funds

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Lazard Funds are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lazard Funds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lazard International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard International Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Lazard Funds and Lazard International

The main advantage of trading using opposite Lazard Funds and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard Funds 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.

The idea behind The Lazard Funds and Lazard International Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.