Correlation Between Hawaii Municipal and Neuberger Berman

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

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

Diversification Opportunities for Hawaii Municipal and Neuberger Berman

0.53

Correlation Coefficient

Hawaii Municipal  Neuberger Berman

Very weak diversification

The 3 months correlation between Hawaii and Neuberger is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hawaii Municipal Bond and Neuberger Berman Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Mlp and Hawaii Municipal 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 Hawaii Municipal Bond 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 Mlp has no effect on the direction of Hawaii Municipal i.e., Hawaii Municipal and Neuberger Berman go up and down completely randomly.

Pair Corralation between Hawaii Municipal and Neuberger Berman

Assuming the 90 days horizon Hawaii Municipal is expected to generate 9.74 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Hawaii Municipal Bond is 8.76 times less risky than Neuberger Berman. It trades about 0.07 of its potential returns per unit of risk. Neuberger Berman Mlp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  859.00  in Neuberger Berman Mlp on October 8, 2024 and sell it today you would earn a total of  32.00  from holding Neuberger Berman Mlp or generate 3.73% return on investment over 90 days.

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

Hawaii Municipal Bond  vs.  Neuberger Berman Mlp

Hawaii Municipal Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawaii Municipal Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Hawaii Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Mlp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Mlp are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unsteady primary indicators, Neuberger Berman may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hawaii Municipal and Neuberger Berman

The main advantage of trading using opposite Hawaii Municipal and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaii Municipal 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 Hawaii Municipal Bond and Neuberger Berman Mlp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.