Correlation Between Frontier Mfg and Neuberger Berman

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

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

Diversification Opportunities for Frontier Mfg and Neuberger Berman

-0.16

Correlation Coefficient

Frontier Mfg  Neuberger Berman

Good diversification

The 3 months correlation between Frontier and Neuberger is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Mfg Global and Neuberger Berman Genesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Genesis and Frontier Mfg 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 Frontier Mfg Global 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 Genesis has no effect on the direction of Frontier Mfg i.e., Frontier Mfg and Neuberger Berman go up and down completely randomly.

Pair Corralation between Frontier Mfg and Neuberger Berman

Assuming the 90 days horizon Frontier Mfg Global is expected to generate 0.62 times more return on investment than Neuberger Berman. However, Frontier Mfg Global is 1.62 times less risky than Neuberger Berman. It trades about 0.09 of its potential returns per unit of risk. Neuberger Berman Genesis is currently generating about -0.13 per unit of risk. If you would invest  1,453  in Frontier Mfg Global on December 31, 2024 and sell it today you would earn a total of  50.00  from holding Frontier Mfg Global or generate 3.44% return on investment over 90 days.

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

Frontier Mfg Global  vs.  Neuberger Berman Genesis

Frontier Mfg Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Frontier Mfg Global are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Frontier Mfg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Genesis

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Frontier Mfg and Neuberger Berman

The main advantage of trading using opposite Frontier Mfg and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Mfg 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 Frontier Mfg Global and Neuberger Berman Genesis 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.