Correlation Between Sparta Capital and Neuberger Berman

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

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

Diversification Opportunities for Sparta Capital and Neuberger Berman

0.71

Correlation Coefficient

Sparta Capital  Neuberger Berman

Poor diversification

The 3 months correlation between Sparta and Neuberger is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Neuberger Berman High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman High and Sparta Capital 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 Sparta Capital 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 High has no effect on the direction of Sparta Capital i.e., Sparta Capital and Neuberger Berman go up and down completely randomly.

Pair Corralation between Sparta Capital and Neuberger Berman

Assuming the 90 days horizon Sparta Capital is expected to under-perform the Neuberger Berman. In addition to that, Sparta Capital is 2.91 times more volatile than Neuberger Berman High. It trades about -0.12 of its total potential returns per unit of risk. Neuberger Berman High is currently generating about -0.02 per unit of volatility. If you would invest  795.00  in Neuberger Berman High on September 2, 2024 and sell it today you would lose (13.00) from holding Neuberger Berman High or give up 1.64% of portfolio value over 90 days.

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

Sparta Capital  vs.  Neuberger Berman High

Sparta Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparta Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Neuberger Berman High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman High has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical indicators, Neuberger Berman is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sparta Capital and Neuberger Berman

The main advantage of trading using opposite Sparta Capital and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital 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 Sparta Capital and Neuberger Berman High 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.