Correlation Between IShares Utilities and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both IShares Utilities 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 IShares Utilities and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and Neuberger Berman ETF, you can compare the effects of market volatilities on IShares Utilities 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 IShares Utilities with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and Neuberger Berman.
Diversification Opportunities for IShares Utilities and Neuberger Berman
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Neuberger is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and Neuberger Berman ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman ETF and IShares Utilities 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 iShares Utilities ETF 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 ETF has no effect on the direction of IShares Utilities i.e., IShares Utilities and Neuberger Berman go up and down completely randomly.
Pair Corralation between IShares Utilities and Neuberger Berman
Considering the 90-day investment horizon iShares Utilities ETF is expected to generate 2.11 times more return on investment than Neuberger Berman. However, IShares Utilities is 2.11 times more volatile than Neuberger Berman ETF. It trades about 0.09 of its potential returns per unit of risk. Neuberger Berman ETF is currently generating about 0.19 per unit of risk. If you would invest 10,157 in iShares Utilities ETF on August 26, 2024 and sell it today you would earn a total of 207.00 from holding iShares Utilities ETF or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. Neuberger Berman ETF
Performance |
| Timeline |
| iShares Utilities ETF |
| Neuberger Berman ETF |
IShares Utilities and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and Neuberger Berman
The main advantage of trading using opposite IShares Utilities and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities 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.| IShares Utilities vs. Global X CleanTech | IShares Utilities vs. Global X Clean | IShares Utilities vs. Global X Wind | IShares Utilities vs. Global X Thematic |
| Neuberger Berman vs. Tidal Trust II | Neuberger Berman vs. Tidal Trust II | Neuberger Berman vs. First Trust Dorsey | Neuberger Berman vs. Direxion Daily META |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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