Correlation Between Elfun Government and Neuberger Berman

Can any of the company-specific risk be diversified away by investing in both Elfun Government 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 Government 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 Government Money and Neuberger Berman Small, you can compare the effects of market volatilities on Elfun Government 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 Government with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Neuberger Berman.

Diversification Opportunities for Elfun Government and Neuberger Berman

0.0

Correlation Coefficient

Elfun Government  Neuberger Berman

Pay attention - limited upside

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

Pair Corralation between Elfun Government and Neuberger Berman

If you would invest  4,992  in Neuberger Berman Small on September 17, 2024 and sell it today you would earn a total of  107.00  from holding Neuberger Berman Small or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Elfun Government Money  vs.  Neuberger Berman Small

Elfun Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elfun Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Elfun Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Small

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Neuberger Berman may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Elfun Government and Neuberger Berman

The main advantage of trading using opposite Elfun Government and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government 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 Government Money and Neuberger Berman Small 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.