Correlation Between Fidelity MSCI and Neuberger Berman

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

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

Diversification Opportunities for Fidelity MSCI and Neuberger Berman

0.44

Correlation Coefficient

Fidelity MSCI  Neuberger Berman

Very weak diversification

The 3 months correlation between Fidelity and Neuberger is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Consumer and Neuberger Berman Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Next and Fidelity MSCI 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 Fidelity MSCI Consumer 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 Next has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and Neuberger Berman go up and down completely randomly.

Pair Corralation between Fidelity MSCI and Neuberger Berman

Given the investment horizon of 90 days Fidelity MSCI Consumer is expected to under-perform the Neuberger Berman. In addition to that, Fidelity MSCI is 1.43 times more volatile than Neuberger Berman Next. It trades about -0.15 of its total potential returns per unit of risk. Neuberger Berman Next is currently generating about -0.03 per unit of volatility. If you would invest  2,489  in Neuberger Berman Next on December 30, 2024 and sell it today you would lose (54.00) from holding Neuberger Berman Next or give up 2.17% of portfolio value over 90 days.

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

Fidelity MSCI Consumer  vs.  Neuberger Berman Next

Fidelity MSCI Consumer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity MSCI Consumer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Neuberger Berman Next

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neuberger Berman Next has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fidelity MSCI and Neuberger Berman

The main advantage of trading using opposite Fidelity MSCI and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity MSCI 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 Fidelity MSCI Consumer and Neuberger Berman Next 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.