Correlation Between Neuberger Berman and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth Fund, you can compare the effects of market volatilities on Neuberger Berman and Smallcap Growth 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Smallcap Growth.
Diversification Opportunities for Neuberger Berman and Smallcap Growth
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neuberger and SMALLCAP is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Income and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Smallcap Growth go up and down completely randomly.
Pair Corralation between Neuberger Berman and Smallcap Growth
Assuming the 90 days horizon Neuberger Berman is expected to generate 4.04 times less return on investment than Smallcap Growth. But when comparing it to its historical volatility, Neuberger Berman Income is 4.03 times less risky than Smallcap Growth. It trades about 0.26 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,063 in Smallcap Growth Fund on October 24, 2024 and sell it today you would earn a total of 54.00 from holding Smallcap Growth Fund or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Neuberger Berman Income vs. Smallcap Growth Fund
Performance |
| Timeline |
| Neuberger Berman Income |
| Smallcap Growth |
Neuberger Berman and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuberger Berman and Smallcap Growth
The main advantage of trading using opposite Neuberger Berman and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.| Neuberger Berman vs. Dreyfus High Yield | Neuberger Berman vs. Blackrock High Yield | Neuberger Berman vs. Jpmorgan High Yield | Neuberger Berman vs. Federated High Yield |
| Smallcap Growth vs. Multi Manager High Yield | Smallcap Growth vs. Neuberger Berman Income | Smallcap Growth vs. Siit High Yield | Smallcap Growth vs. Voya 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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