Correlation Between Neuberger Berman and Redwood Managed
Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and Redwood Managed 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 Neuberger Berman and Redwood Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neuberger Berman Intermediate and Redwood Managed Municipal, you can compare the effects of market volatilities on Neuberger Berman and Redwood Managed 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 Neuberger Berman with a short position of Redwood Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Redwood Managed.
Diversification Opportunities for Neuberger Berman and Redwood Managed
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Neuberger and Redwood is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Intermediate and Redwood Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwood Managed Municipal and Neuberger Berman 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 Neuberger Berman Intermediate are associated (or correlated) with Redwood Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwood Managed Municipal has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Redwood Managed go up and down completely randomly.
Pair Corralation between Neuberger Berman and Redwood Managed
Assuming the 90 days horizon Neuberger Berman is expected to generate 1.01 times less return on investment than Redwood Managed. In addition to that, Neuberger Berman is 1.77 times more volatile than Redwood Managed Municipal. It trades about 0.06 of its total potential returns per unit of risk. Redwood Managed Municipal is currently generating about 0.1 per unit of volatility. If you would invest 1,374 in Redwood Managed Municipal on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Redwood Managed Municipal or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Neuberger Berman Intermediate vs. Redwood Managed Municipal
Performance |
| Timeline |
| Neuberger Berman Int |
| Redwood Managed Municipal |
Neuberger Berman and Redwood Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuberger Berman and Redwood Managed
The main advantage of trading using opposite Neuberger Berman and Redwood Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Redwood Managed 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 Redwood Managed will offset losses from the drop in Redwood Managed's long position.| Neuberger Berman vs. Vanguard Total Stock | Neuberger Berman vs. Vanguard 500 Index | Neuberger Berman vs. Vanguard Total Stock | Neuberger Berman vs. Vanguard Total Stock |
| Redwood Managed vs. Redwood Alphafactor Tactical | Redwood Managed vs. Redwood Systematic Macro | Redwood Managed vs. Neuberger Berman Genesis | Redwood Managed vs. Calamos Strategic Total |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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