Correlation Between Neuberger Berman and Flaherty Crumrine

Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and Flaherty Crumrine 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 Flaherty Crumrine 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 Flaherty Crumrine Preferredome, you can compare the effects of market volatilities on Neuberger Berman and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Flaherty Crumrine.

Diversification Opportunities for Neuberger Berman and Flaherty Crumrine

0.58

Correlation Coefficient

Neuberger Berman  Flaherty Crumrine

Very weak diversification

The 3 months correlation between Neuberger and Flaherty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman IMF and Flaherty Crumrine Preferredome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Flaherty Crumrine go up and down completely randomly.

Pair Corralation between Neuberger Berman and Flaherty Crumrine

Considering the 90-day investment horizon Neuberger Berman is expected to generate 1.83 times less return on investment than Flaherty Crumrine. But when comparing it to its historical volatility, Neuberger Berman IMF is 1.15 times less risky than Flaherty Crumrine. It trades about 0.06 of its potential returns per unit of risk. Flaherty Crumrine Preferredome is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,097  in Flaherty Crumrine Preferredome on November 20, 2024 and sell it today you would earn a total of  47.00  from holding Flaherty Crumrine Preferredome or generate 4.28% return on investment over 90 days.

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

Neuberger Berman IMF  vs.  Flaherty Crumrine Preferredome

Neuberger Berman IMF

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman IMF are ranked lower than 4 (%) 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.

Flaherty Crumrine

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Preferredome are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Neuberger Berman and Flaherty Crumrine

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

The idea behind Neuberger Berman IMF and Flaherty Crumrine Preferredome 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.