Correlation Between Lazard Global and Alliancebernstein

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

By analyzing existing cross correlation between Lazard Global Total and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Lazard Global and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard Global and Alliancebernstein.

Diversification Opportunities for Lazard Global and Alliancebernstein

0.68

Correlation Coefficient

Lazard Global  Alliancebernstein

Poor diversification

The 3 months correlation between Lazard and Alliancebernstein is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Global Total and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Total are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Lazard Global i.e., Lazard Global and Alliancebernstein go up and down completely randomly.

Pair Corralation between Lazard Global and Alliancebernstein

Considering the 90-day investment horizon Lazard Global Total is expected to generate 1.41 times more return on investment than Alliancebernstein. However, Lazard Global is 1.41 times more volatile than Alliancebernstein National Municipal. It trades about 0.03 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.04 per unit of risk. If you would invest  1,663  in Lazard Global Total on September 12, 2024 and sell it today you would earn a total of  23.00  from holding Lazard Global Total or generate 1.38% return on investment over 90 days.

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

Lazard Global Total  vs.  Alliancebernstein National Mun

Lazard Global Total

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Global Total are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong technical and fundamental indicators, Lazard Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lazard Global and Alliancebernstein

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

The idea behind Lazard Global Total and Alliancebernstein National Municipal 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 Valuation module to check real value of public entities based on technical and fundamental data.