Correlation Between Invesco Energy and Neuberger Berman

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

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

Diversification Opportunities for Invesco Energy and Neuberger Berman

0.52

Correlation Coefficient

Invesco Energy  Neuberger Berman

Very weak diversification

The 3 months correlation between Invesco and Neuberger is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Neuberger Berman Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Sus and Invesco Energy 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 Invesco Energy 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 Sus has no effect on the direction of Invesco Energy i.e., Invesco Energy and Neuberger Berman go up and down completely randomly.

Pair Corralation between Invesco Energy and Neuberger Berman

Assuming the 90 days horizon Invesco Energy Fund is expected to under-perform the Neuberger Berman. In addition to that, Invesco Energy is 1.22 times more volatile than Neuberger Berman Sustainable. It trades about -0.1 of its total potential returns per unit of risk. Neuberger Berman Sustainable is currently generating about 0.01 per unit of volatility. If you would invest  4,908  in Neuberger Berman Sustainable on September 22, 2024 and sell it today you would earn a total of  22.00  from holding Neuberger Berman Sustainable or generate 0.45% return on investment over 90 days.

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

Invesco Energy Fund  vs.  Neuberger Berman Sustainable

Invesco Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Energy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Sus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Sustainable has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental 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 Invesco Energy and Neuberger Berman

The main advantage of trading using opposite Invesco Energy and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy 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 Invesco Energy Fund and Neuberger Berman Sustainable 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.