Correlation Between Neuberger Berman and Vanguard Explorer
Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and Vanguard Explorer 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 Vanguard Explorer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neuberger Berman Large and Vanguard Explorer Fund, you can compare the effects of market volatilities on Neuberger Berman and Vanguard Explorer 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 Vanguard Explorer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Vanguard Explorer.
Diversification Opportunities for Neuberger Berman and Vanguard Explorer
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Neuberger and Vanguard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Large and Vanguard Explorer Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Explorer 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 Large are associated (or correlated) with Vanguard Explorer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Explorer has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Vanguard Explorer go up and down completely randomly.
Pair Corralation between Neuberger Berman and Vanguard Explorer
Assuming the 90 days horizon Neuberger Berman is expected to generate 1.79 times less return on investment than Vanguard Explorer. But when comparing it to its historical volatility, Neuberger Berman Large is 1.59 times less risky than Vanguard Explorer. It trades about 0.05 of its potential returns per unit of risk. Vanguard Explorer Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,106 in Vanguard Explorer Fund on September 4, 2024 and sell it today you would earn a total of 3,109 from holding Vanguard Explorer Fund or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neuberger Berman Large vs. Vanguard Explorer Fund
Performance |
| Timeline |
| Neuberger Berman Large |
| Vanguard Explorer |
Neuberger Berman and Vanguard Explorer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuberger Berman and Vanguard Explorer
The main advantage of trading using opposite Neuberger Berman and Vanguard Explorer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Vanguard Explorer 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 Vanguard Explorer will offset losses from the drop in Vanguard Explorer's long position.| Neuberger Berman vs. Dreyfus Natural Resources | Neuberger Berman vs. Gamco Natural Resources | Neuberger Berman vs. Energy Basic Materials | Neuberger Berman vs. Fidelity Advisor Energy |
| Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |