Correlation Between Regional Management and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Regional Management 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 Regional Management and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Management Corp and Neuberger Berman Next, you can compare the effects of market volatilities on Regional Management 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 Regional Management with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Neuberger Berman.
Diversification Opportunities for Regional Management and Neuberger Berman
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Neuberger is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Neuberger Berman Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Next and Regional Management 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 Regional Management Corp 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 Next has no effect on the direction of Regional Management i.e., Regional Management and Neuberger Berman go up and down completely randomly.
Pair Corralation between Regional Management and Neuberger Berman
Allowing for the 90-day total investment horizon Regional Management is expected to generate 1.94 times less return on investment than Neuberger Berman. In addition to that, Regional Management is 2.28 times more volatile than Neuberger Berman Next. It trades about 0.02 of its total potential returns per unit of risk. Neuberger Berman Next is currently generating about 0.09 per unit of volatility. If you would invest 937.00 in Neuberger Berman Next on August 28, 2024 and sell it today you would earn a total of 376.00 from holding Neuberger Berman Next or generate 40.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Management Corp vs. Neuberger Berman Next
Performance |
| Timeline |
| Regional Management Corp |
| Neuberger Berman Next |
Regional Management and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Neuberger Berman
The main advantage of trading using opposite Regional Management and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management 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.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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