Correlation Between IShares Bloomberg and Neuberger Berman

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

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

Diversification Opportunities for IShares Bloomberg and Neuberger Berman

0.97

Correlation Coefficient

IShares Bloomberg  Neuberger Berman

Almost no diversification

The 3 months correlation between IShares and Neuberger is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bloomberg Roll and Neuberger Berman Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Com and IShares Bloomberg 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 iShares Bloomberg Roll 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 Com has no effect on the direction of IShares Bloomberg i.e., IShares Bloomberg and Neuberger Berman go up and down completely randomly.

Pair Corralation between IShares Bloomberg and Neuberger Berman

Given the investment horizon of 90 days IShares Bloomberg is expected to generate 1.48 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, iShares Bloomberg Roll is 1.04 times less risky than Neuberger Berman. It trades about 0.08 of its potential returns per unit of risk. Neuberger Berman Commodity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,094  in Neuberger Berman Commodity on September 12, 2024 and sell it today you would earn a total of  116.00  from holding Neuberger Berman Commodity or generate 5.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Bloomberg Roll  vs.  Neuberger Berman Commodity

iShares Bloomberg Roll

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Bloomberg Roll are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, IShares Bloomberg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Com

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Commodity are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Neuberger Berman is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Bloomberg and Neuberger Berman

The main advantage of trading using opposite IShares Bloomberg and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bloomberg 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 iShares Bloomberg Roll and Neuberger Berman Commodity 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.