Correlation Between Neuberger Berman and Nuveen Multi

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

Diversification Opportunities for Neuberger Berman and Nuveen Multi

-0.32

Correlation Coefficient

Neuberger Berman  Nuveen Multi

Very good diversification

The 3 months correlation between Neuberger and Nuveen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Re and Nuveen Multi Mrkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Multi Mrkt 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 Nuveen Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Multi Mrkt has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Nuveen Multi go up and down completely randomly.

Pair Corralation between Neuberger Berman and Nuveen Multi

Considering the 90-day investment horizon Neuberger Berman Re is expected to under-perform the Nuveen Multi. In addition to that, Neuberger Berman is 1.98 times more volatile than Nuveen Multi Mrkt. It trades about -0.08 of its total potential returns per unit of risk. Nuveen Multi Mrkt is currently generating about 0.07 per unit of volatility. If you would invest  597.00  in Nuveen Multi Mrkt on December 2, 2024 and sell it today you would earn a total of  19.00  from holding Nuveen Multi Mrkt or generate 3.18% return on investment over 90 days.

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

Neuberger Berman Re  vs.  Nuveen Multi Mrkt

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.

Nuveen Multi Mrkt

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Multi Mrkt are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy primary indicators, Nuveen Multi is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Nuveen Multi

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

The idea behind Neuberger Berman Re and Nuveen Multi Mrkt 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.