Correlation Between Emerging Markets and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Lazard Emerging 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 Emerging Markets and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Fund and Lazard Emerging Markets, you can compare the effects of market volatilities on Emerging Markets and Lazard Emerging 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 Emerging Markets with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Lazard Emerging.
Diversification Opportunities for Emerging Markets and Lazard Emerging
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerging and Lazard is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Fund and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Emerging Markets 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 Emerging Markets Fund are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Emerging Markets i.e., Emerging Markets and Lazard Emerging go up and down completely randomly.
Pair Corralation between Emerging Markets and Lazard Emerging
Assuming the 90 days horizon Emerging Markets Fund is expected to under-perform the Lazard Emerging. In addition to that, Emerging Markets is 1.04 times more volatile than Lazard Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Lazard Emerging Markets is currently generating about -0.02 per unit of volatility. If you would invest 1,739 in Lazard Emerging Markets on January 24, 2024 and sell it today you would lose (10.00) from holding Lazard Emerging Markets or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Fund vs. Lazard Emerging Markets
Performance |
| Timeline |
| Emerging Markets |
| Lazard Emerging Markets |
Emerging Markets and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Lazard Emerging
The main advantage of trading using opposite Emerging Markets and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Lazard Emerging 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 Emerging will offset losses from the drop in Lazard Emerging's long position.| Emerging Markets vs. International Developed Markets | Emerging Markets vs. Global Real Estate | Emerging Markets vs. Global Real Estate | Emerging Markets vs. Global Real Estate |
| Lazard Emerging vs. Lazard Global Dynamic | Lazard Emerging vs. Lazard Global Dynamic | Lazard Emerging vs. Lazard International Quality | Lazard Emerging vs. Lazard Small Mid Cap |
Check out your portfolio center.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.
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