Correlation Between BlackRock Health and Neuberger Berman

Can any of the company-specific risk be diversified away by investing in both BlackRock Health 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 BlackRock Health and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Health Sciences and Neuberger Berman Next, you can compare the effects of market volatilities on BlackRock Health 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 BlackRock Health with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Health and Neuberger Berman.

Diversification Opportunities for BlackRock Health and Neuberger Berman

0.0

Correlation Coefficient

BlackRock Health  Neuberger Berman

Pay attention - limited upside

The 3 months correlation between BlackRock and Neuberger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Health Sciences and Neuberger Berman Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Next and BlackRock Health 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 BlackRock Health Sciences 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 Next has no effect on the direction of BlackRock Health i.e., BlackRock Health and Neuberger Berman go up and down completely randomly.

Pair Corralation between BlackRock Health and Neuberger Berman

Given the investment horizon of 90 days BlackRock Health is expected to generate 8.58 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, BlackRock Health Sciences is 1.25 times less risky than Neuberger Berman. It trades about 0.03 of its potential returns per unit of risk. Neuberger Berman Next is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,188  in Neuberger Berman Next on August 31, 2024 and sell it today you would earn a total of  125.00  from holding Neuberger Berman Next or generate 10.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BlackRock Health Sciences  vs.  Neuberger Berman Next

BlackRock Health Sciences

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Health Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, BlackRock Health is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Next

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Next are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Neuberger Berman may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with BlackRock Health and Neuberger Berman

The main advantage of trading using opposite BlackRock Health and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Health 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 BlackRock Health Sciences and Neuberger Berman Next 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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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.