Correlation Between Lazard International and Tocqueville International

Can any of the company-specific risk be diversified away by investing in both Lazard International and Tocqueville 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 Lazard International and Tocqueville International 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 Tocqueville 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 Lazard International with a short position of Tocqueville International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Tocqueville International.

Diversification Opportunities for Lazard International and Tocqueville International

0.89

Correlation Coefficient

Lazard International  Tocqueville International

Very poor diversification

The 3 months correlation between Lazard and Tocqueville is 0.89. 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 International 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 Tocqueville International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville International has no effect on the direction of Lazard International i.e., Lazard International and Tocqueville International go up and down completely randomly.

Pair Corralation between Lazard International and Tocqueville International

Assuming the 90 days horizon Lazard International Small is expected to under-perform the Tocqueville International. In addition to that, Lazard International is 1.2 times more volatile than The Tocqueville International. It trades about -0.13 of its total potential returns per unit of risk. The Tocqueville International is currently generating about -0.04 per unit of volatility. If you would invest  1,825  in The Tocqueville International on September 12, 2024 and sell it today you would lose (33.00) from holding The Tocqueville International or give up 1.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
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 latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tocqueville International

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, Tocqueville 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 Lazard International and Tocqueville International

The main advantage of trading using opposite Lazard International and Tocqueville International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard International position performs unexpectedly, Tocqueville 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 Tocqueville International will offset losses from the drop in Tocqueville International'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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..