Correlation Between Neuberger Berman and Tekla Healthcare

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

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

Diversification Opportunities for Neuberger Berman and Tekla Healthcare

-0.47

Correlation Coefficient

Neuberger Berman  Tekla Healthcare

Very good diversification

The 3 months correlation between Neuberger and Tekla is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Re and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv 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 Re are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Neuberger Berman and Tekla Healthcare

Considering the 90-day investment horizon Neuberger Berman Re is expected to under-perform the Tekla Healthcare. In addition to that, Neuberger Berman is 1.39 times more volatile than Tekla Healthcare Investors. It trades about -0.08 of its total potential returns per unit of risk. Tekla Healthcare Investors is currently generating about 0.09 per unit of volatility. If you would invest  1,568  in Tekla Healthcare Investors on December 28, 2024 and sell it today you would earn a total of  81.00  from holding Tekla Healthcare Investors or generate 5.17% return on investment over 90 days.

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

Neuberger Berman Re  vs.  Tekla Healthcare Investors

Neuberger Berman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neuberger Berman Re has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Tekla Healthcare Inv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla Healthcare Investors are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Tekla Healthcare is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Neuberger Berman and Tekla Healthcare

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

The idea behind Neuberger Berman Re and Tekla Healthcare Investors 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.