Correlation Between Scharf Fund and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Scharf Fund 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 Scharf Fund and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Neuberger Berman Small, you can compare the effects of market volatilities on Scharf Fund 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 Scharf Fund with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Neuberger Berman.
Diversification Opportunities for Scharf Fund and Neuberger Berman
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Neuberger is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Neuberger Berman Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Small and Scharf Fund 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 Scharf Fund Retail 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 Small has no effect on the direction of Scharf Fund i.e., Scharf Fund and Neuberger Berman go up and down completely randomly.
Pair Corralation between Scharf Fund and Neuberger Berman
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Neuberger Berman. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 1.74 times less risky than Neuberger Berman. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Neuberger Berman Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,925 in Neuberger Berman Small on October 24, 2024 and sell it today you would earn a total of 197.00 from holding Neuberger Berman Small or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Neuberger Berman Small
Performance |
| Timeline |
| Scharf Fund Retail |
| Neuberger Berman Small |
Scharf Fund and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Neuberger Berman
The main advantage of trading using opposite Scharf Fund and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund 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.| Scharf Fund vs. Kinetics Small Cap | Scharf Fund vs. Vy Columbia Small | Scharf Fund vs. Franklin Small Cap | Scharf Fund vs. Ab Small Cap |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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