Correlation Between Lazard Global and Mexico Equity

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

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

Diversification Opportunities for Lazard Global and Mexico Equity

0.75

Correlation Coefficient

Lazard Global  Mexico Equity

Poor diversification

The 3 months correlation between Lazard and Mexico is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Global Total and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And and Lazard Global 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 Global Total are associated (or correlated) with Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Lazard Global i.e., Lazard Global and Mexico Equity go up and down completely randomly.

Pair Corralation between Lazard Global and Mexico Equity

Considering the 90-day investment horizon Lazard Global Total is expected to generate 0.83 times more return on investment than Mexico Equity. However, Lazard Global Total is 1.21 times less risky than Mexico Equity. It trades about 0.04 of its potential returns per unit of risk. Mexico Equity And is currently generating about -0.07 per unit of risk. If you would invest  1,613  in Lazard Global Total on September 5, 2024 and sell it today you would earn a total of  77.00  from holding Lazard Global Total or generate 4.77% return on investment over 90 days.

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

Lazard Global Total  vs.  Mexico Equity And

Lazard Global Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Global Total has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong technical and fundamental indicators, Lazard Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Mexico Equity And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mexico Equity And has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Mexico Equity is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lazard Global and Mexico Equity

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

The idea behind Lazard Global Total and Mexico Equity And 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.