Correlation Between Virtus Convertible and Neuberger Berman

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

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

Diversification Opportunities for Virtus Convertible and Neuberger Berman

-0.07

Correlation Coefficient

Virtus Convertible  Neuberger Berman

Good diversification

The 3 months correlation between Virtus and Neuberger is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Neuberger Berman Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Intl and Virtus Convertible 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 Virtus Convertible 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 Intl has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Neuberger Berman go up and down completely randomly.

Pair Corralation between Virtus Convertible and Neuberger Berman

Assuming the 90 days horizon Virtus Convertible is expected to generate 1.85 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Virtus Convertible is 1.2 times less risky than Neuberger Berman. It trades about 0.06 of its potential returns per unit of risk. Neuberger Berman Intl is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,252  in Neuberger Berman Intl on October 25, 2024 and sell it today you would earn a total of  18.00  from holding Neuberger Berman Intl or generate 1.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Virtus Convertible  vs.  Neuberger Berman Intl

Virtus Convertible

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Convertible are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Virtus Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Neuberger Berman Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Intl has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental 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 Virtus Convertible and Neuberger Berman

The main advantage of trading using opposite Virtus Convertible and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible 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 Virtus Convertible and Neuberger Berman Intl 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.