Correlation Between Lazard Short and Ab Value

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

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

Diversification Opportunities for Lazard Short and Ab Value

-0.54

Correlation Coefficient

Lazard Short  Ab Value

Excellent diversification

The 3 months correlation between Lazard and ABVCX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lazard Short Duration and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund and Lazard 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 Lazard Short Duration are associated (or correlated) with Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Lazard Short i.e., Lazard Short and Ab Value go up and down completely randomly.

Pair Corralation between Lazard Short and Ab Value

Assuming the 90 days horizon Lazard Short Duration is expected to under-perform the Ab Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lazard Short Duration is 6.21 times less risky than Ab Value. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Ab Value Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,888  in Ab Value Fund on September 14, 2024 and sell it today you would earn a total of  115.00  from holding Ab Value Fund or generate 6.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lazard Short Duration  vs.  Ab Value Fund

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 forward indicators, Lazard Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ab Value Fund

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lazard Short and Ab Value

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

The idea behind Lazard Short Duration and Ab Value Fund 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.