Correlation Between Neuberger Berman and Wilmington Trust

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

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

Diversification Opportunities for Neuberger Berman and Wilmington Trust

-0.01

Correlation Coefficient

Neuberger Berman  Wilmington Trust

Good diversification

The 3 months correlation between Neuberger and Wilmington is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Intl and Wilmington Trust Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Trust Ret 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 Intl are associated (or correlated) with Wilmington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Trust Ret has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Wilmington Trust go up and down completely randomly.

Pair Corralation between Neuberger Berman and Wilmington Trust

Assuming the 90 days horizon Neuberger Berman Intl is expected to under-perform the Wilmington Trust. But the mutual fund apears to be less risky and, when comparing its historical volatility, Neuberger Berman Intl is 1.51 times less risky than Wilmington Trust. The mutual fund trades about -0.35 of its potential returns per unit of risk. The Wilmington Trust Retirement is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  34,133  in Wilmington Trust Retirement on October 11, 2024 and sell it today you would lose (1,493) from holding Wilmington Trust Retirement or give up 4.37% of portfolio value over 90 days.

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

Neuberger Berman Intl  vs.  Wilmington Trust Retirement

Neuberger Berman Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Intl has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Wilmington Trust Ret

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Trust Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wilmington Trust 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 Wilmington Trust

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

The idea behind Neuberger Berman Intl and Wilmington Trust Retirement 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.