Correlation Between Pimco Short and Lazard Short

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

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

Diversification Opportunities for Pimco Short and Lazard Short

-0.76

Correlation Coefficient

Pimco Short  Lazard Short

Pay attention - limited upside

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

Pair Corralation between Pimco Short and Lazard Short

Assuming the 90 days horizon Pimco Short is expected to generate 1.94 times less return on investment than Lazard Short. But when comparing it to its historical volatility, Pimco Short Term Fund is 1.65 times less risky than Lazard Short. It trades about 0.1 of its potential returns per unit of risk. Lazard Short Duration is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  955.00  in Lazard Short Duration on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Lazard Short Duration or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Pimco Short Term Fund  vs.  Lazard Short Duration

Pimco Short Term

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Short Term Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lazard Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Short and Lazard Short

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

The idea behind Pimco Short Term Fund and Lazard Short Duration 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.