Correlation Between Neuberger Berman and Neuberger Berman

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

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

Diversification Opportunities for Neuberger Berman and Neuberger Berman

0.65

Correlation Coefficient

Neuberger Berman  Neuberger Berman

Poor diversification

The 3 months correlation between Neuberger and Neuberger is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Absolute and Neuberger Berman Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Focus 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 Absolute are associated (or correlated) with Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Focus has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Neuberger Berman go up and down completely randomly.

Pair Corralation between Neuberger Berman and Neuberger Berman

Assuming the 90 days horizon Neuberger Berman is expected to generate 2.81 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Neuberger Berman Absolute is 2.61 times less risky than Neuberger Berman. It trades about 0.14 of its potential returns per unit of risk. Neuberger Berman Focus is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,944  in Neuberger Berman Focus on September 14, 2024 and sell it today you would earn a total of  194.00  from holding Neuberger Berman Focus or generate 6.59% return on investment over 90 days.

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

Neuberger Berman Absolute  vs.  Neuberger Berman Focus

Neuberger Berman Absolute

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Absolute are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Neuberger Berman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Focus

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Focus are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Neuberger Berman may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Neuberger Berman and Neuberger Berman

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

The idea behind Neuberger Berman Absolute and Neuberger Berman Focus 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.