Correlation Between Alternative Asset and Lazard International

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

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

Diversification Opportunities for Alternative Asset and Lazard International

-0.2

Correlation Coefficient

Alternative Asset  Lazard International

Good diversification

The 3 months correlation between Alternative and Lazard is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Asset Allocation and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Alternative Asset 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 Alternative Asset Allocation 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 Alternative Asset i.e., Alternative Asset and Lazard International go up and down completely randomly.

Pair Corralation between Alternative Asset and Lazard International

Assuming the 90 days horizon Alternative Asset is expected to generate 1.23 times less return on investment than Lazard International. But when comparing it to its historical volatility, Alternative Asset Allocation is 3.18 times less risky than Lazard International. It trades about 0.31 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,719  in Lazard International Equity on September 13, 2024 and sell it today you would earn a total of  23.00  from holding Lazard International Equity or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Alternative Asset Allocation  vs.  Lazard International Equity

Alternative Asset

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alternative Asset Allocation are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Alternative Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Lazard International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alternative Asset and Lazard International

The main advantage of trading using opposite Alternative Asset and Lazard International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Asset 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 Alternative Asset Allocation and Lazard International Equity 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.