Correlation Between Eaton Vance and Neuberger Berman

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

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

Diversification Opportunities for Eaton Vance and Neuberger Berman

0.9

Correlation Coefficient

Eaton Vance  Neuberger Berman

Almost no diversification

The 3 months correlation between Eaton and Neuberger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax 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 Eaton Vance 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 Eaton Vance Tax 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 Eaton Vance i.e., Eaton Vance and Neuberger Berman go up and down completely randomly.

Pair Corralation between Eaton Vance and Neuberger Berman

Considering the 90-day investment horizon Eaton Vance is expected to generate 1.74 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Eaton Vance Tax is 1.36 times less risky than Neuberger Berman. It trades about 0.14 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 September 12, 2024 and sell it today you would earn a total of  121.00  from holding Neuberger Berman Next or generate 10.19% return on investment over 90 days.

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

Eaton Vance Tax  vs.  Neuberger Berman Next

Eaton Vance Tax

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated 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 January 2025.

Pair Trading with Eaton Vance and Neuberger Berman

The main advantage of trading using opposite Eaton Vance and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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 Eaton Vance Tax 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..