Correlation Between Nuance Mid and Lazard Global

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

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

Diversification Opportunities for Nuance Mid and Lazard Global

0.76

Correlation Coefficient

Nuance Mid  Lazard Global

Poor diversification

The 3 months correlation between Nuance and Lazard is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuance Mid Cap and Lazard Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Listed and Nuance Mid 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 Nuance Mid Cap are associated (or correlated) with Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Listed has no effect on the direction of Nuance Mid i.e., Nuance Mid and Lazard Global go up and down completely randomly.

Pair Corralation between Nuance Mid and Lazard Global

Assuming the 90 days horizon Nuance Mid Cap is expected to generate 1.28 times more return on investment than Lazard Global. However, Nuance Mid is 1.28 times more volatile than Lazard Global Listed. It trades about 0.06 of its potential returns per unit of risk. Lazard Global Listed is currently generating about 0.05 per unit of risk. If you would invest  1,324  in Nuance Mid Cap on September 3, 2024 and sell it today you would earn a total of  38.00  from holding Nuance Mid Cap or generate 2.87% return on investment over 90 days.

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

Nuance Mid Cap  vs.  Lazard Global Listed

Nuance Mid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuance Mid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Nuance Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Global Listed

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Global Listed are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Lazard Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuance Mid and Lazard Global

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

The idea behind Nuance Mid Cap and Lazard Global Listed 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 CEOs Directory module to screen CEOs from public companies around the world.