Correlation Between Neuberger Berman and Avantis Emerging

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

By analyzing existing cross correlation between Neuberger Berman ETF and Avantis Emerging Markets, you can compare the effects of market volatilities on Neuberger Berman and Avantis Emerging 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 Avantis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Avantis Emerging.

Diversification Opportunities for Neuberger Berman and Avantis Emerging

0.46

Correlation Coefficient

Neuberger Berman  Avantis Emerging

Very weak diversification

The 3 months correlation between Neuberger and Avantis is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman ETF and Avantis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Emerging Markets 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 ETF are associated (or correlated) with Avantis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Emerging Markets has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Avantis Emerging go up and down completely randomly.

Pair Corralation between Neuberger Berman and Avantis Emerging

Given the investment horizon of 90 days Neuberger Berman ETF is expected to under-perform the Avantis Emerging. In addition to that, Neuberger Berman is 1.06 times more volatile than Avantis Emerging Markets. It trades about -0.1 of its total potential returns per unit of risk. Avantis Emerging Markets is currently generating about 0.21 per unit of volatility. If you would invest  4,808  in Avantis Emerging Markets on September 15, 2024 and sell it today you would earn a total of  124.00  from holding Avantis Emerging Markets or generate 2.58% return on investment over 90 days.

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

Neuberger Berman ETF  vs.  Avantis Emerging Markets

Neuberger Berman ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Avantis Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avantis Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Avantis Emerging is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Neuberger Berman and Avantis Emerging

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

The idea behind Neuberger Berman ETF and Avantis Emerging Markets 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.