Correlation Between Gabelli Global and Neuberger Berman

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

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

Diversification Opportunities for Gabelli Global and Neuberger Berman

0.7

Correlation Coefficient

Gabelli Global  Neuberger Berman

Poor diversification

The 3 months correlation between Gabelli and Neuberger is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small 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 Global 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 Gabelli Global Small 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 Global i.e., Gabelli Global and Neuberger Berman go up and down completely randomly.

Pair Corralation between Gabelli Global and Neuberger Berman

Considering the 90-day investment horizon Gabelli Global Small is expected to generate 1.35 times more return on investment than Neuberger Berman. However, Gabelli Global is 1.35 times more volatile than Neuberger Berman High. It trades about 0.1 of its potential returns per unit of risk. Neuberger Berman High is currently generating about 0.12 per unit of risk. If you would invest  1,149  in Gabelli Global Small on December 29, 2024 and sell it today you would earn a total of  57.00  from holding Gabelli Global Small or generate 4.96% return on investment over 90 days.

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

Gabelli Global Small  vs.  Neuberger Berman High

Gabelli Global Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gabelli Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman High are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable technical indicators, Neuberger Berman is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gabelli Global and Neuberger Berman

The main advantage of trading using opposite Gabelli Global and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global 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 Gabelli Global Small 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.