Correlation Between Alliancebernstein and Lazard Global

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

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

Diversification Opportunities for Alliancebernstein and Lazard Global

0.83

Correlation Coefficient

Alliancebernstein  Lazard Global

Very poor diversification

The 3 months correlation between Alliancebernstein and Lazard is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun 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 Alliancebernstein 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 Alliancebernstein National Municipal 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 Alliancebernstein i.e., Alliancebernstein and Lazard Global go up and down completely randomly.

Pair Corralation between Alliancebernstein and Lazard Global

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 0.73 times more return on investment than Lazard Global. However, Alliancebernstein National Municipal is 1.37 times less risky than Lazard Global. It trades about -0.15 of its potential returns per unit of risk. Lazard Global Total is currently generating about -0.12 per unit of risk. If you would invest  1,142  in Alliancebernstein National Municipal on October 13, 2024 and sell it today you would lose (71.00) from holding Alliancebernstein National Municipal or give up 6.22% of portfolio value over 90 days.

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

Alliancebernstein National Mun  vs.  Lazard Global Total

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 latest fragile performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Lazard Global Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lazard Global Total has generated negative risk-adjusted returns adding no value to fund investors. Despite latest fragile performance, the Fund's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the fund traders.

Pair Trading with Alliancebernstein and Lazard Global

The main advantage of trading using opposite Alliancebernstein and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein 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 Alliancebernstein National Municipal 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.