Correlation Between Neuberger Berman and Crawford Multi

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

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

Diversification Opportunities for Neuberger Berman and Crawford Multi

-0.39

Correlation Coefficient

Neuberger Berman  Crawford Multi

Very good diversification

The 3 months correlation between Neuberger and Crawford is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Absolute and Crawford Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Multi Asset and Neuberger Berman 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 Neuberger Berman Absolute are associated (or correlated) with Crawford Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Multi Asset has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Crawford Multi go up and down completely randomly.

Pair Corralation between Neuberger Berman and Crawford Multi

Assuming the 90 days horizon Neuberger Berman Absolute is expected to generate 0.45 times more return on investment than Crawford Multi. However, Neuberger Berman Absolute is 2.2 times less risky than Crawford Multi. It trades about 0.16 of its potential returns per unit of risk. Crawford Multi Asset Income is currently generating about -0.43 per unit of risk. If you would invest  1,230  in Neuberger Berman Absolute on September 24, 2024 and sell it today you would earn a total of  9.00  from holding Neuberger Berman Absolute or generate 0.73% return on investment over 90 days.

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

Neuberger Berman Absolute  vs.  Crawford Multi Asset Income

Neuberger Berman Absolute

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Absolute 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, Neuberger Berman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crawford Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Crawford Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Crawford Multi

The main advantage of trading using opposite Neuberger Berman and Crawford Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Crawford Multi 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 Crawford Multi will offset losses from the drop in Crawford Multi's long position.

The idea behind Neuberger Berman Absolute and Crawford Multi Asset Income 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.