Correlation Between Jpmorgan Small and Neuberger Berman

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

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

Diversification Opportunities for Jpmorgan Small and Neuberger Berman

0.74

Correlation Coefficient

Jpmorgan Small  Neuberger Berman

Poor diversification

The 3 months correlation between Jpmorgan and Neuberger is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Small Cap and Neuberger Berman Socially in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Socially and Jpmorgan Small 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 Jpmorgan Small Cap 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 Socially has no effect on the direction of Jpmorgan Small i.e., Jpmorgan Small and Neuberger Berman go up and down completely randomly.

Pair Corralation between Jpmorgan Small and Neuberger Berman

Assuming the 90 days horizon Jpmorgan Small is expected to generate 1.71 times less return on investment than Neuberger Berman. In addition to that, Jpmorgan Small is 1.2 times more volatile than Neuberger Berman Socially. It trades about 0.04 of its total potential returns per unit of risk. Neuberger Berman Socially is currently generating about 0.08 per unit of volatility. If you would invest  3,611  in Neuberger Berman Socially on October 23, 2024 and sell it today you would earn a total of  1,407  from holding Neuberger Berman Socially or generate 38.96% return on investment over 90 days.

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

Jpmorgan Small Cap  vs.  Neuberger Berman Socially

Jpmorgan Small Cap

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jpmorgan Small may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Neuberger Berman Socially

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Socially are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jpmorgan Small and Neuberger Berman

The main advantage of trading using opposite Jpmorgan Small and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Small 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 Jpmorgan Small Cap and Neuberger Berman Socially 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.