Correlation Between Marex Group and Lazard

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

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

Diversification Opportunities for Marex Group and Lazard

0.79

Correlation Coefficient

Marex Group  Lazard

Poor diversification

The 3 months correlation between Marex and Lazard is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marex Group plc and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard and Marex Group 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 Marex Group plc are associated (or correlated) with Lazard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard has no effect on the direction of Marex Group i.e., Marex Group and Lazard go up and down completely randomly.

Pair Corralation between Marex Group and Lazard

Considering the 90-day investment horizon Marex Group plc is expected to generate 0.65 times more return on investment than Lazard. However, Marex Group plc is 1.53 times less risky than Lazard. It trades about 0.2 of its potential returns per unit of risk. Lazard is currently generating about 0.09 per unit of risk. If you would invest  2,508  in Marex Group plc on September 13, 2024 and sell it today you would earn a total of  580.00  from holding Marex Group plc or generate 23.13% return on investment over 90 days.

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

Marex Group plc  vs.  Lazard

Marex Group plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marex Group plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Marex Group showed solid returns over the last few months and may actually be approaching a breakup point.

Lazard

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Lazard showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marex Group and Lazard

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

The idea behind Marex Group plc and Lazard 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.