Correlation Between Ab Global and Lazard Funds
Can any of the company-specific risk be diversified away by investing in both Ab Global and Lazard Funds 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 Ab Global and Lazard Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and The Lazard Funds, you can compare the effects of market volatilities on Ab Global and Lazard Funds 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 Ab Global with a short position of Lazard Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Lazard Funds.
Diversification Opportunities for Ab Global and Lazard Funds
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CABIX and Lazard is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and The Lazard Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Funds and Ab 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 Ab Global Risk are associated (or correlated) with Lazard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Funds has no effect on the direction of Ab Global i.e., Ab Global and Lazard Funds go up and down completely randomly.
Pair Corralation between Ab Global and Lazard Funds
Assuming the 90 days horizon Ab Global is expected to generate 2.69 times less return on investment than Lazard Funds. But when comparing it to its historical volatility, Ab Global Risk is 2.19 times less risky than Lazard Funds. It trades about 0.05 of its potential returns per unit of risk. The Lazard Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 882.00 in The Lazard Funds on September 4, 2024 and sell it today you would earn a total of 338.00 from holding The Lazard Funds or generate 38.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ab Global Risk vs. The Lazard Funds
Performance |
| Timeline |
| Ab Global Risk |
| Lazard Funds |
Ab Global and Lazard Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Lazard Funds
The main advantage of trading using opposite Ab Global and Lazard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Lazard Funds 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 Funds will offset losses from the drop in Lazard Funds' long position.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab Minnesota Portfolio |
| Lazard Funds vs. Lazard Global Dynamic | Lazard Funds vs. Lazard Global Dynamic | Lazard Funds vs. Lazard International Quality | Lazard Funds 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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