Correlation Between Disney and LAZARD

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

By analyzing existing cross correlation between Walt Disney and LAZARD GROUP LLC, you can compare the effects of market volatilities on Disney and LAZARD 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 Disney with a short position of LAZARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and LAZARD.

Diversification Opportunities for Disney and LAZARD

-0.49

Correlation Coefficient

Disney  LAZARD

Very good diversification

The 3 months correlation between Disney and LAZARD is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and LAZARD GROUP LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAZARD GROUP LLC and Disney 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 Walt Disney are associated (or correlated) with LAZARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAZARD GROUP LLC has no effect on the direction of Disney i.e., Disney and LAZARD go up and down completely randomly.

Pair Corralation between Disney and LAZARD

Considering the 90-day investment horizon Walt Disney is expected to generate 1.41 times more return on investment than LAZARD. However, Disney is 1.41 times more volatile than LAZARD GROUP LLC. It trades about 0.31 of its potential returns per unit of risk. LAZARD GROUP LLC is currently generating about -0.12 per unit of risk. If you would invest  8,865  in Walt Disney on September 5, 2024 and sell it today you would earn a total of  2,780  from holding Walt Disney or generate 31.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.5%
Values	Daily Returns

Walt Disney  vs.  LAZARD GROUP LLC

Walt Disney

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

LAZARD GROUP LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAZARD GROUP LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for LAZARD GROUP LLC investors.

Pair Trading with Disney and LAZARD

The main advantage of trading using opposite Disney and LAZARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, LAZARD 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 will offset losses from the drop in LAZARD's long position.

The idea behind Walt Disney and LAZARD GROUP LLC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.