Correlation Between Stifel Financial and Lazard

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

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

Diversification Opportunities for Stifel Financial and Lazard

0.93

Correlation Coefficient

Stifel Financial  Lazard

Almost no diversification

The 3 months correlation between Stifel and Lazard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard and Stifel Financial 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 Stifel Financial 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 Stifel Financial i.e., Stifel Financial and Lazard go up and down completely randomly.

Pair Corralation between Stifel Financial and Lazard

Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.27 times less return on investment than Lazard. But when comparing it to its historical volatility, Stifel Financial is 1.19 times less risky than Lazard. It trades about 0.17 of its potential returns per unit of risk. Lazard is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5,026  in Lazard on August 31, 2024 and sell it today you would earn a total of  746.00  from holding Lazard or generate 14.84% return on investment over 90 days.

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

Stifel Financial  vs.  Lazard

Stifel Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stifel Financial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Stifel Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Lazard

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard are ranked lower than 10 (%) 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 Stifel Financial and Lazard

The main advantage of trading using opposite Stifel Financial and Lazard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial 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 Stifel Financial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.