Correlation Between Abrdn Emerging and Lazard Global

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

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

Diversification Opportunities for Abrdn Emerging and Lazard Global

0.8

Correlation Coefficient

Abrdn Emerging  Lazard Global

Very poor diversification

The 3 months correlation between Abrdn and Lazard is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Lazard Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Total and Abrdn Emerging 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 Abrdn Emerging Markets are associated (or correlated) with Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Total has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Lazard Global go up and down completely randomly.

Pair Corralation between Abrdn Emerging and Lazard Global

Considering the 90-day investment horizon Abrdn Emerging Markets is expected to generate 1.46 times more return on investment than Lazard Global. However, Abrdn Emerging is 1.46 times more volatile than Lazard Global Total. It trades about 0.01 of its potential returns per unit of risk. Lazard Global Total is currently generating about -0.01 per unit of risk. If you would invest  509.00  in Abrdn Emerging Markets on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Abrdn Emerging Markets or generate 0.0% return on investment over 90 days.

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

Abrdn Emerging Markets  vs.  Lazard Global Total

Abrdn Emerging Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abrdn Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable technical and fundamental indicators, Abrdn Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lazard Global Total

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lazard Global Total has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Abrdn Emerging and Lazard Global

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

The idea behind Abrdn Emerging Markets and Lazard Global Total 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.