Correlation Between Absolute Convertible and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Absolute 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 Absolute 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 Absolute Convertible Arbitrage and Neuberger Berman Large, you can compare the effects of market volatilities on Absolute 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 Absolute Convertible with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Neuberger Berman.
Diversification Opportunities for Absolute Convertible and Neuberger Berman
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolute and Neuberger is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Neuberger Berman Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Large and Absolute 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 Absolute Convertible Arbitrage 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 Large has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Neuberger Berman go up and down completely randomly.
Pair Corralation between Absolute Convertible and Neuberger Berman
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.12 times more return on investment than Neuberger Berman. However, Absolute Convertible Arbitrage is 8.17 times less risky than Neuberger Berman. It trades about 0.38 of its potential returns per unit of risk. Neuberger Berman Large is currently generating about -0.02 per unit of risk. If you would invest 1,146 in Absolute Convertible Arbitrage on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Absolute Convertible Arbitrage or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Neuberger Berman Large
Performance |
| Timeline |
| Absolute Convertible |
| Neuberger Berman Large |
Absolute Convertible and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Neuberger Berman
The main advantage of trading using opposite Absolute Convertible and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute 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.| Absolute Convertible vs. Advent Claymore Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Putnam Convertible Incm Gwth |
| Neuberger Berman vs. Fidelity Sai Inflationfocused | Neuberger Berman vs. Blackrock Inflation Protected | Neuberger Berman vs. Simt Multi Asset Inflation | Neuberger Berman vs. Aqr Managed Futures |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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