Correlation Between Neuberger Berman and Ellington Income

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

Diversification Opportunities for Neuberger Berman and Ellington Income

0.92

Correlation Coefficient

Neuberger Berman  Ellington Income

Almost no diversification

The 3 months correlation between Neuberger and Ellington is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Ellington Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellington Income Opp 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 Ellington Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellington Income Opp has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Ellington Income go up and down completely randomly.

Pair Corralation between Neuberger Berman and Ellington Income

Considering the 90-day investment horizon Neuberger Berman High is expected to generate 5.34 times more return on investment than Ellington Income. However, Neuberger Berman is 5.34 times more volatile than Ellington Income Opportunities. It trades about 0.14 of its potential returns per unit of risk. Ellington Income Opportunities is currently generating about 0.3 per unit of risk. If you would invest  730.00  in Neuberger Berman High on December 23, 2024 and sell it today you would earn a total of  39.00  from holding Neuberger Berman High or generate 5.34% return on investment over 90 days.

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

Neuberger Berman High  vs.  Ellington Income Opportunities

Neuberger Berman High

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman High are ranked lower than 11 (%) 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.

Ellington Income Opp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ellington Income Opportunities are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Ellington Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Ellington Income

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

The idea behind Neuberger Berman High and Ellington Income Opportunities 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.