Correlation Between Western Assets and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Western Assets 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 Western Assets and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Neuberger Berman Core, you can compare the effects of market volatilities on Western Assets 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 Western Assets with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Neuberger Berman.
Diversification Opportunities for Western Assets and Neuberger Berman
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Neuberger is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Neuberger Berman Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Core and Western Assets 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 Western Assets Emerging 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 Core has no effect on the direction of Western Assets i.e., Western Assets and Neuberger Berman go up and down completely randomly.
Pair Corralation between Western Assets and Neuberger Berman
Assuming the 90 days horizon Western Assets Emerging is expected to generate 1.13 times more return on investment than Neuberger Berman. However, Western Assets is 1.13 times more volatile than Neuberger Berman Core. It trades about 0.06 of its potential returns per unit of risk. Neuberger Berman Core is currently generating about -0.04 per unit of risk. If you would invest 1,066 in Western Assets Emerging on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Western Assets Emerging or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Neuberger Berman Core
Performance |
| Timeline |
| Western Assets Emerging |
| Neuberger Berman Core |
Western Assets and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Neuberger Berman
The main advantage of trading using opposite Western Assets and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets 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.| Western Assets vs. Vanguard Total Stock | Western Assets vs. Vanguard 500 Index | Western Assets vs. Vanguard Total Stock | Western Assets vs. Vanguard Total Stock |
| Neuberger Berman vs. Transamerica Emerging Markets | Neuberger Berman vs. The Hartford Emerging | Neuberger Berman vs. Shelton Emerging Markets | Neuberger Berman vs. Western Assets Emerging |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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