Correlation Between Commodities Strategy and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Neuberger Berman Global, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Neuberger Berman.
Diversification Opportunities for Commodities Strategy and Neuberger Berman
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commodities and Neuberger is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Neuberger Berman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Global and Commodities Strategy 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 Commodities Strategy Fund 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 Global has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Neuberger Berman go up and down completely randomly.
Pair Corralation between Commodities Strategy and Neuberger Berman
If you would invest 1,028 in Neuberger Berman Global on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Neuberger Berman Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Neuberger Berman Global
Performance |
| Timeline |
| Commodities Strategy |
| Neuberger Berman Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Commodities Strategy and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Neuberger Berman
The main advantage of trading using opposite Commodities Strategy and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.The idea behind Commodities Strategy Fund and Neuberger Berman Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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