Correlation Between Neuberger Berman and Deutsche Equity

Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and Deutsche Equity 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 Deutsche Equity 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 Deutsche Equity 500, you can compare the effects of market volatilities on Neuberger Berman and Deutsche Equity 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 Deutsche Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Deutsche Equity.

Diversification Opportunities for Neuberger Berman and Deutsche Equity

-0.47

Correlation Coefficient

Neuberger Berman  Deutsche Equity

Very good diversification

The 3 months correlation between Neuberger and Deutsche is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Deutsche Equity 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Equity 500 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 Deutsche Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Equity 500 has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Deutsche Equity go up and down completely randomly.

Pair Corralation between Neuberger Berman and Deutsche Equity

Considering the 90-day investment horizon Neuberger Berman is expected to generate 43.73 times less return on investment than Deutsche Equity. In addition to that, Neuberger Berman is 1.53 times more volatile than Deutsche Equity 500. It trades about 0.0 of its total potential returns per unit of risk. Deutsche Equity 500 is currently generating about 0.2 per unit of volatility. If you would invest  16,922  in Deutsche Equity 500 on September 12, 2024 and sell it today you would earn a total of  1,432  from holding Deutsche Equity 500 or generate 8.46% 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.  Deutsche Equity 500

Neuberger Berman High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman High has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical indicators, Neuberger Berman is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Deutsche Equity 500

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Equity 500 are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Deutsche Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Neuberger Berman and Deutsche Equity

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

The idea behind Neuberger Berman High and Deutsche Equity 500 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.