Correlation Between Quantitative Longshort and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort 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 Quantitative Longshort and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Neuberger Berman Sustainable, you can compare the effects of market volatilities on Quantitative Longshort 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 Quantitative Longshort with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Neuberger Berman.
Diversification Opportunities for Quantitative Longshort and Neuberger Berman
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quantitative and Neuberger is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Neuberger Berman Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Sus and Quantitative Longshort 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 Quantitative Longshort Equity 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 Sus has no effect on the direction of Quantitative Longshort i.e., Quantitative Longshort and Neuberger Berman go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Neuberger Berman
Assuming the 90 days horizon Quantitative Longshort is expected to generate 1.28 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Quantitative Longshort Equity is 2.21 times less risky than Neuberger Berman. It trades about 0.26 of its potential returns per unit of risk. Neuberger Berman Sustainable is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,930 in Neuberger Berman Sustainable on October 21, 2024 and sell it today you would earn a total of 106.00 from holding Neuberger Berman Sustainable or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Neuberger Berman Sustainable
Performance |
| Timeline |
| Quantitative Longshort |
| Neuberger Berman Sus |
Quantitative Longshort and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Neuberger Berman
The main advantage of trading using opposite Quantitative Longshort and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort 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 Quantitative Longshort Equity and Neuberger Berman Sustainable 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.
| Neuberger Berman vs. Quantitative Longshort Equity | Neuberger Berman vs. Old Westbury Fixed | Neuberger Berman vs. Ab Select Equity | Neuberger Berman vs. Aqr Long Short Equity |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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