Correlation Between Lazard Global and Principal Active

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

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

Diversification Opportunities for Lazard Global and Principal Active

0.0

Correlation Coefficient

Lazard Global  Principal Active

Pay attention - limited upside

The 3 months correlation between Lazard and Principal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Global Fixed and Principal Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Active Global and Lazard Global 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 Lazard Global Fixed are associated (or correlated) with Principal Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Active Global has no effect on the direction of Lazard Global i.e., Lazard Global and Principal Active go up and down completely randomly.

Pair Corralation between Lazard Global and Principal Active

If you would invest  0.00  in Lazard Global Fixed on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Lazard Global Fixed or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Lazard Global Fixed  vs.  Principal Active Global

Lazard Global Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Principal Active Global

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Principal Active Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Principal Active is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lazard Global and Principal Active

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

The idea behind Lazard Global Fixed and Principal Active Global 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.