Correlation Between Gabelli Equity and Neuberger Berman

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

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

Diversification Opportunities for Gabelli Equity and Neuberger Berman

0.79

Correlation Coefficient

Gabelli Equity  Neuberger Berman

Poor diversification

The 3 months correlation between Gabelli and Neuberger is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Neuberger Berman High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman High and Gabelli Equity 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 The Gabelli Equity 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 High has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Neuberger Berman go up and down completely randomly.

Pair Corralation between Gabelli Equity and Neuberger Berman

Assuming the 90 days trading horizon The Gabelli Equity is expected to generate 0.8 times more return on investment than Neuberger Berman. However, The Gabelli Equity is 1.25 times less risky than Neuberger Berman. It trades about 0.03 of its potential returns per unit of risk. Neuberger Berman High is currently generating about 0.02 per unit of risk. If you would invest  2,079  in The Gabelli Equity on October 7, 2024 and sell it today you would earn a total of  80.00  from holding The Gabelli Equity or generate 3.85% return on investment over 90 days.

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

The Gabelli Equity  vs.  Neuberger Berman High

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Neuberger Berman High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman High has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the fund private investors.

Pair Trading with Gabelli Equity and Neuberger Berman

The main advantage of trading using opposite Gabelli Equity and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity 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 The Gabelli Equity and Neuberger Berman High 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.