Correlation Between Neuberger Berman and Alger Capital

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

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

Diversification Opportunities for Neuberger Berman and Alger Capital

-0.42

Correlation Coefficient

Neuberger Berman  Alger Capital

Very good diversification

The 3 months correlation between Neuberger and Alger is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec 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 High are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Alger Capital go up and down completely randomly.

Pair Corralation between Neuberger Berman and Alger Capital

Considering the 90-day investment horizon Neuberger Berman High is expected to generate 0.3 times more return on investment than Alger Capital. However, Neuberger Berman High is 3.34 times less risky than Alger Capital. It trades about 0.12 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about -0.1 per unit of risk. If you would invest  732.00  in Neuberger Berman High on December 29, 2024 and sell it today you would earn a total of  33.00  from holding Neuberger Berman High or generate 4.51% return on investment over 90 days.

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

Neuberger Berman High  vs.  Alger Capital Appreciation

Neuberger Berman High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman High are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable technical indicators, Neuberger Berman is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alger Capital Apprec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Neuberger Berman and Alger Capital

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

The idea behind Neuberger Berman High and Alger Capital Appreciation 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.