Correlation Between Neuberger Berman and Eaton Vance

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

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

Diversification Opportunities for Neuberger Berman and Eaton Vance

0.73

Correlation Coefficient

Neuberger Berman  Eaton Vance

Poor diversification

The 3 months correlation between Neuberger and Eaton is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman IMF and Eaton Vance California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance California 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 IMF are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance California has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Eaton Vance go up and down completely randomly.

Pair Corralation between Neuberger Berman and Eaton Vance

Considering the 90-day investment horizon Neuberger Berman IMF is expected to generate 1.25 times more return on investment than Eaton Vance. However, Neuberger Berman is 1.25 times more volatile than Eaton Vance California. It trades about 0.09 of its potential returns per unit of risk. Eaton Vance California is currently generating about 0.05 per unit of risk. If you would invest  1,006  in Neuberger Berman IMF on December 28, 2024 and sell it today you would earn a total of  37.00  from holding Neuberger Berman IMF or generate 3.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Neuberger Berman IMF  vs.  Eaton Vance California

Neuberger Berman IMF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman IMF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Neuberger Berman is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Eaton Vance California

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance California are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Eaton Vance

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

The idea behind Neuberger Berman IMF and Eaton Vance California 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.