Correlation Between Champlain Small and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Champlain Small 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 Champlain Small and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Neuberger Berman Absolute, you can compare the effects of market volatilities on Champlain Small 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 Champlain Small with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Neuberger Berman.
Diversification Opportunities for Champlain Small and Neuberger Berman
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Champlain and Neuberger is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Neuberger Berman Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Absolute and Champlain Small 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 Champlain Small 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 Absolute has no effect on the direction of Champlain Small i.e., Champlain Small and Neuberger Berman go up and down completely randomly.
Pair Corralation between Champlain Small and Neuberger Berman
Assuming the 90 days horizon Champlain Small is expected to generate 6.62 times more return on investment than Neuberger Berman. However, Champlain Small is 6.62 times more volatile than Neuberger Berman Absolute. It trades about 0.33 of its potential returns per unit of risk. Neuberger Berman Absolute is currently generating about 0.06 per unit of risk. If you would invest 2,294 in Champlain Small on September 1, 2024 and sell it today you would earn a total of 258.00 from holding Champlain Small or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Neuberger Berman Absolute
Performance |
| Timeline |
| Champlain Small |
| Neuberger Berman Absolute |
Champlain Small and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Neuberger Berman
The main advantage of trading using opposite Champlain Small and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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.| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
| Neuberger Berman vs. Kinetics Small Cap | Neuberger Berman vs. The Hartford Small | Neuberger Berman vs. Champlain Small | Neuberger Berman vs. Qs Small Capitalization |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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