Correlation Between Neuberger Berman and Blackrock Muniholdings

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

Diversification Opportunities for Neuberger Berman and Blackrock Muniholdings

0.62

Correlation Coefficient

Neuberger Berman  Blackrock Muniholdings

Poor diversification

The 3 months correlation between Neuberger and Blackrock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Blackrock Muniholdings New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Neuberger Berman and Blackrock Muniholdings

Considering the 90-day investment horizon Neuberger Berman High is expected to under-perform the Blackrock Muniholdings. In addition to that, Neuberger Berman is 1.68 times more volatile than Blackrock Muniholdings New. It trades about -0.1 of its total potential returns per unit of risk. Blackrock Muniholdings New is currently generating about -0.09 per unit of volatility. If you would invest  1,295  in Blackrock Muniholdings New on September 26, 2024 and sell it today you would lose (23.00) from holding Blackrock Muniholdings New or give up 1.78% of portfolio value over 90 days.

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

Neuberger Berman High  vs.  Blackrock Muniholdings New

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

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniholdings New has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Blackrock Muniholdings 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 Blackrock Muniholdings

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

The idea behind Neuberger Berman High and Blackrock Muniholdings New 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.