Correlation Between Neuberger Berman and Tekla Life

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

Diversification Opportunities for Neuberger Berman and Tekla Life

0.88

Correlation Coefficient

Neuberger Berman  Tekla Life

Very poor diversification

The 3 months correlation between Neuberger and Tekla is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Tekla Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Life Sciences 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 Tekla Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Life Sciences has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Tekla Life go up and down completely randomly.

Pair Corralation between Neuberger Berman and Tekla Life

Considering the 90-day investment horizon Neuberger Berman High is expected to under-perform the Tekla Life. But the fund apears to be less risky and, when comparing its historical volatility, Neuberger Berman High is 1.72 times less risky than Tekla Life. The fund trades about 0.0 of its potential returns per unit of risk. The Tekla Life Sciences is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,553  in Tekla Life Sciences on October 26, 2024 and sell it today you would earn a total of  9.00  from holding Tekla Life Sciences or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.5%
Values	Daily Returns

Neuberger Berman High  vs.  Tekla Life Sciences

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Tekla Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekla Life Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Tekla Life is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Tekla Life

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

The idea behind Neuberger Berman High and Tekla Life Sciences 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.