Correlation Between Allianzgi Technology and Neuberger Berman

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

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

Diversification Opportunities for Allianzgi Technology and Neuberger Berman

0.58

Correlation Coefficient

Allianzgi Technology  Neuberger Berman

Very weak diversification

The 3 months correlation between Allianzgi and Neuberger is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Neuberger Berman Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Focus and Allianzgi Technology 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 Allianzgi Technology Fund 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 Focus has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Neuberger Berman go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Neuberger Berman

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the Neuberger Berman. In addition to that, Allianzgi Technology is 1.75 times more volatile than Neuberger Berman Focus. It trades about -0.1 of its total potential returns per unit of risk. Neuberger Berman Focus is currently generating about -0.03 per unit of volatility. If you would invest  3,108  in Neuberger Berman Focus on December 24, 2024 and sell it today you would lose (64.00) from holding Neuberger Berman Focus or give up 2.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Allianzgi Technology Fund  vs.  Neuberger Berman Focus

Allianzgi Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Neuberger Berman Focus

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Allianzgi Technology and Neuberger Berman

The main advantage of trading using opposite Allianzgi Technology and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Technology 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 Allianzgi Technology Fund and Neuberger Berman Focus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.