Correlation Between Valic Company and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Neuberger Berman Long, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Neuberger Berman.
Diversification Opportunities for Valic Company and Neuberger Berman
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Neuberger is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I 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 Valic Company 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 Valic Company I 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 Valic Company i.e., Valic Company and Neuberger Berman go up and down completely randomly.
Pair Corralation between Valic Company and Neuberger Berman
Assuming the 90 days horizon Valic Company I is expected to generate 4.1 times more return on investment than Neuberger Berman. However, Valic Company is 4.1 times more volatile than Neuberger Berman Long. It trades about 0.08 of its potential returns per unit of risk. Neuberger Berman Long is currently generating about 0.08 per unit of risk. If you would invest 1,153 in Valic Company I on August 29, 2024 and sell it today you would earn a total of 235.00 from holding Valic Company I or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Neuberger Berman Long
Performance |
| Timeline |
| Valic Company I |
| Neuberger Berman Long |
Valic Company and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Neuberger Berman
The main advantage of trading using opposite Valic Company and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
| Neuberger Berman vs. Calvert High Yield | Neuberger Berman vs. American Century High | Neuberger Berman vs. Dunham High Yield | Neuberger Berman vs. Lord Abbett High |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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