Correlation Between Neuberger Berman and Ab Small

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

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

Diversification Opportunities for Neuberger Berman and Ab Small

0.23

Correlation Coefficient

Neuberger Berman  Ab Small

Modest diversification

The 3 months correlation between Neuberger and SCYVX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Intrinsic and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Intrinsic are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Ab Small go up and down completely randomly.

Pair Corralation between Neuberger Berman and Ab Small

Assuming the 90 days horizon Neuberger Berman Intrinsic is expected to generate 1.15 times more return on investment than Ab Small. However, Neuberger Berman is 1.15 times more volatile than Ab Small Cap. It trades about -0.1 of its potential returns per unit of risk. Ab Small Cap is currently generating about -0.21 per unit of risk. If you would invest  2,294  in Neuberger Berman Intrinsic on December 5, 2024 and sell it today you would lose (172.00) from holding Neuberger Berman Intrinsic or give up 7.5% of portfolio value over 90 days.

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

Neuberger Berman Intrinsic  vs.  Ab Small Cap

Neuberger Berman Int

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neuberger Berman Intrinsic 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.

Ab Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ab Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Neuberger Berman and Ab Small

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

The idea behind Neuberger Berman Intrinsic and Ab Small Cap 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.