Correlation Between Aqr Managed and Neuberger Berman

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

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

Diversification Opportunities for Aqr Managed and Neuberger Berman

0.37

Correlation Coefficient

Aqr Managed  Neuberger Berman

Weak diversification

The 3 months correlation between Aqr and Neuberger is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Neuberger Berman Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Small and Aqr Managed 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 Aqr Managed Futures 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 Small has no effect on the direction of Aqr Managed i.e., Aqr Managed and Neuberger Berman go up and down completely randomly.

Pair Corralation between Aqr Managed and Neuberger Berman

Assuming the 90 days horizon Aqr Managed is expected to generate 10.57 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Aqr Managed Futures is 1.47 times less risky than Neuberger Berman. It trades about 0.01 of its potential returns per unit of risk. Neuberger Berman Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,610  in Neuberger Berman Small on September 23, 2024 and sell it today you would earn a total of  1,464  from holding Neuberger Berman Small or generate 40.55% return on investment over 90 days.

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

Aqr Managed Futures  vs.  Neuberger Berman Small

Aqr Managed Futures

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Small has generated negative risk-adjusted returns adding no value to fund investors. 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 Aqr Managed and Neuberger Berman

The main advantage of trading using opposite Aqr Managed and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed 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 Aqr Managed Futures and Neuberger Berman Small 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.