Correlation Between American Century and Neuberger Berman

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

By analyzing existing cross correlation between American Century ETF and Neuberger Berman ETF, you can compare the effects of market volatilities on American Century and Neuberger Berman 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 American Century with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Neuberger Berman.

Diversification Opportunities for American Century and Neuberger Berman

0.07

Correlation Coefficient

American Century  Neuberger Berman

Significant diversification

The 3 months correlation between American and Neuberger is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding American Century ETF and Neuberger Berman ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman ETF and American Century 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 American Century ETF are associated (or correlated) with Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman ETF has no effect on the direction of American Century i.e., American Century and Neuberger Berman go up and down completely randomly.

Pair Corralation between American Century and Neuberger Berman

Given the investment horizon of 90 days American Century ETF is expected to generate 1.41 times more return on investment than Neuberger Berman. However, American Century is 1.41 times more volatile than Neuberger Berman ETF. It trades about 0.38 of its potential returns per unit of risk. Neuberger Berman ETF is currently generating about 0.21 per unit of risk. If you would invest  6,615  in American Century ETF on October 20, 2024 and sell it today you would earn a total of  322.00  from holding American Century ETF or generate 4.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

American Century ETF  vs.  Neuberger Berman ETF

American Century ETF

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Century ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, American Century is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Neuberger Berman ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with American Century and Neuberger Berman

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

The idea behind American Century ETF and Neuberger Berman ETF 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 Transaction History module to view history of all your transactions and understand their impact on performance.