Correlation Between Lazard International and The Tocqueville

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

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

Diversification Opportunities for Lazard International and The Tocqueville

0.83

Correlation Coefficient

Lazard International  The Tocqueville

Very poor diversification

The 3 months correlation between Lazard and The is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Small and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville Inte 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 Small are associated (or correlated) with The Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville Inte has no effect on the direction of Lazard International i.e., Lazard International and The Tocqueville go up and down completely randomly.

Pair Corralation between Lazard International and The Tocqueville

Assuming the 90 days horizon Lazard International Small is expected to generate 1.25 times more return on investment than The Tocqueville. However, Lazard International is 1.25 times more volatile than The Tocqueville International. It trades about 0.0 of its potential returns per unit of risk. The Tocqueville International is currently generating about -0.01 per unit of risk. If you would invest  831.00  in Lazard International Small on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Lazard International Small or generate 0.0% return on investment over 90 days.

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

Lazard International Small  vs.  The Tocqueville International

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 fairly strong primary indicators, Lazard International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tocqueville Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Tocqueville International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, The Tocqueville 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 The Tocqueville

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

The idea behind Lazard International Small and The Tocqueville International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.