Correlation Between Elfun Trusts and Neuberger Berman

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

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

Diversification Opportunities for Elfun Trusts and Neuberger Berman

-0.63

Correlation Coefficient

Elfun Trusts  Neuberger Berman

Excellent diversification

The 3 months correlation between Elfun and Neuberger is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Neuberger Berman Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman and Elfun Trusts 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 Elfun Trusts Elfun 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 has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Neuberger Berman go up and down completely randomly.

Pair Corralation between Elfun Trusts and Neuberger Berman

Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 0.58 times more return on investment than Neuberger Berman. However, Elfun Trusts Elfun is 1.71 times less risky than Neuberger Berman. It trades about 0.16 of its potential returns per unit of risk. Neuberger Berman Re is currently generating about -0.08 per unit of risk. If you would invest  9,387  in Elfun Trusts Elfun on September 13, 2024 and sell it today you would earn a total of  672.00  from holding Elfun Trusts Elfun or generate 7.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Elfun Trusts Elfun  vs.  Neuberger Berman Re

Elfun Trusts Elfun

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Elfun Trusts may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Neuberger Berman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Re has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Elfun Trusts and Neuberger Berman

The main advantage of trading using opposite Elfun Trusts and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts 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 Elfun Trusts Elfun and Neuberger Berman Re 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.