Correlation Between Lazard International and Lazard Strategic

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

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

Diversification Opportunities for Lazard International and Lazard Strategic

-0.38

Correlation Coefficient

Lazard International  Lazard Strategic

Very good diversification

The 3 months correlation between Lazard and Lazard is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Strategic and Lazard Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Strategic Equity and Lazard International 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 International Strategic are associated (or correlated) with Lazard Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Strategic Equity has no effect on the direction of Lazard International i.e., Lazard International and Lazard Strategic go up and down completely randomly.

Pair Corralation between Lazard International and Lazard Strategic

Assuming the 90 days horizon Lazard International is expected to generate 1.96 times less return on investment than Lazard Strategic. In addition to that, Lazard International is 1.1 times more volatile than Lazard Strategic Equity. It trades about 0.05 of its total potential returns per unit of risk. Lazard Strategic Equity is currently generating about 0.1 per unit of volatility. If you would invest  1,424  in Lazard Strategic Equity on September 12, 2024 and sell it today you would earn a total of  386.00  from holding Lazard Strategic Equity or generate 27.11% return on investment over 90 days.

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

Lazard International Strategic  vs.  Lazard Strategic Equity

Lazard International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lazard Strategic Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Strategic Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lazard Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lazard International and Lazard Strategic

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

The idea behind Lazard International Strategic and Lazard Strategic 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.