Correlation Between Baron Health and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Baron Health 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 Baron Health and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Neuberger Berman Income, you can compare the effects of market volatilities on Baron Health 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 Baron Health with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Neuberger Berman.
Diversification Opportunities for Baron Health and Neuberger Berman
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baron and Neuberger is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Neuberger Berman Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Income and Baron Health 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 Baron Health Care 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 Income has no effect on the direction of Baron Health i.e., Baron Health and Neuberger Berman go up and down completely randomly.
Pair Corralation between Baron Health and Neuberger Berman
Assuming the 90 days horizon Baron Health Care is expected to generate 3.47 times more return on investment than Neuberger Berman. However, Baron Health is 3.47 times more volatile than Neuberger Berman Income. It trades about 0.21 of its potential returns per unit of risk. Neuberger Berman Income is currently generating about 0.26 per unit of risk. If you would invest 1,948 in Baron Health Care on October 24, 2024 and sell it today you would earn a total of 64.00 from holding Baron Health Care or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Neuberger Berman Income
Performance |
| Timeline |
| Baron Health Care |
| Neuberger Berman Income |
Baron Health and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Neuberger Berman
The main advantage of trading using opposite Baron Health and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health 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.| Baron Health vs. Advent Claymore Convertible | Baron Health vs. Virtus Convertible | Baron Health vs. Rationalpier 88 Convertible | Baron Health vs. Fidelity Sai Convertible |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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