Correlation Between State Street and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Premier and Neuberger Berman Long, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Neuberger Berman.
Diversification Opportunities for State Street and Neuberger Berman
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and Neuberger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding State Street Premier and Neuberger Berman Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Long and State Street 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 State Street Premier 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 Long has no effect on the direction of State Street i.e., State Street and Neuberger Berman go up and down completely randomly.
Pair Corralation between State Street and Neuberger Berman
Assuming the 90 days horizon State Street Premier is expected to generate 4.07 times more return on investment than Neuberger Berman. However, State Street is 4.07 times more volatile than Neuberger Berman Long. It trades about 0.06 of its potential returns per unit of risk. Neuberger Berman Long is currently generating about 0.22 per unit of risk. If you would invest 14,034 in State Street Premier on August 28, 2024 and sell it today you would earn a total of 197.00 from holding State Street Premier or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Premier vs. Neuberger Berman Long
Performance |
| Timeline |
| State Street Premier |
| Neuberger Berman Long |
State Street and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Neuberger Berman
The main advantage of trading using opposite State Street and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Locorr Longshort Modities | State Street vs. Ultra Short Term Fixed | State Street vs. Barings Active Short | State Street vs. Angel Oak Ultrashort |
| Neuberger Berman vs. Victory Rs Partners | Neuberger Berman vs. Heartland Value Plus | Neuberger Berman vs. Pace Smallmedium Value | Neuberger Berman vs. Applied Finance Explorer |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |