Correlation Between Lazard International and Tocqueville Fund

Can any of the company-specific risk be diversified away by investing in both Lazard International and Tocqueville Fund 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 Fund 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 Fund, you can compare the effects of market volatilities on Lazard International and Tocqueville Fund 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 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard International and Tocqueville Fund.

Diversification Opportunities for Lazard International and Tocqueville Fund

-0.65

Correlation Coefficient

Lazard International  Tocqueville Fund

Excellent diversification

The 3 months correlation between Lazard and Tocqueville is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lazard International Small and The Tocqueville Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville Fund 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 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville Fund has no effect on the direction of Lazard International i.e., Lazard International and Tocqueville Fund go up and down completely randomly.

Pair Corralation between Lazard International and Tocqueville Fund

Assuming the 90 days horizon Lazard International Small is expected to under-perform the Tocqueville Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lazard International Small is 1.43 times less risky than Tocqueville Fund. The mutual fund trades about -0.16 of its potential returns per unit of risk. The The Tocqueville Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,824  in The Tocqueville Fund on September 14, 2024 and sell it today you would earn a total of  17.00  from holding The Tocqueville Fund or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Lazard International Small  vs.  The Tocqueville Fund

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 Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Lazard International Small and The Tocqueville Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.