Correlation Between Neuberger Berman and American Mutual
Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and American Mutual 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 Neuberger Berman and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neuberger Berman Income and American Mutual Fund, you can compare the effects of market volatilities on Neuberger Berman and American Mutual 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 Neuberger Berman with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and American Mutual.
Diversification Opportunities for Neuberger Berman and American Mutual
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neuberger and American is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Income and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Neuberger Berman 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 Neuberger Berman Income are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and American Mutual go up and down completely randomly.
Pair Corralation between Neuberger Berman and American Mutual
Assuming the 90 days horizon Neuberger Berman Income is expected to generate 0.27 times more return on investment than American Mutual. However, Neuberger Berman Income is 3.71 times less risky than American Mutual. It trades about 0.1 of its potential returns per unit of risk. American Mutual Fund is currently generating about -0.07 per unit of risk. If you would invest 770.00 in Neuberger Berman Income on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Neuberger Berman Income or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Neuberger Berman Income vs. American Mutual Fund
Performance |
| Timeline |
| Neuberger Berman Income |
| American Mutual |
Neuberger Berman and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuberger Berman and American Mutual
The main advantage of trading using opposite Neuberger Berman and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large |
| American Mutual vs. Jpmorgan High Yield | American Mutual vs. Neuberger Berman Income | American Mutual vs. Fidelity Capital Income | American Mutual vs. Guggenheim High Yield |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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