Correlation Between Nasdaq 100 and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Neuberger Berman Floating, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Neuberger Berman.
Diversification Opportunities for Nasdaq 100 and Neuberger Berman
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Neuberger is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Neuberger Berman Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Floating and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 Floating has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Neuberger Berman go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Neuberger Berman
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 27.84 times more return on investment than Neuberger Berman. However, Nasdaq 100 is 27.84 times more volatile than Neuberger Berman Floating. It trades about 0.14 of its potential returns per unit of risk. Neuberger Berman Floating is currently generating about 0.31 per unit of risk. If you would invest 40,277 in Nasdaq 100 2x Strategy on September 13, 2024 and sell it today you would earn a total of 4,735 from holding Nasdaq 100 2x Strategy or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Neuberger Berman Floating
Performance |
| Timeline |
| Nasdaq 100 2x |
| Neuberger Berman Floating |
Nasdaq 100 and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Neuberger Berman
The main advantage of trading using opposite Nasdaq 100 and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Lgm Risk Managed | Nasdaq 100 vs. Franklin High Income | Nasdaq 100 vs. Alliancebernstein Global High | Nasdaq 100 vs. Artisan High Income |
| Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large | Neuberger Berman vs. Neuberger Berman Large |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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