Correlation Between Gabelli Equity and Neuberger Berman

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

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

Diversification Opportunities for Gabelli Equity and Neuberger Berman

-0.47

Correlation Coefficient

Gabelli Equity  Neuberger Berman

Very good diversification

The 3 months correlation between Gabelli and Neuberger is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Neuberger Berman Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman and Gabelli Equity 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 Gabelli Equity Trust 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 Gabelli Equity i.e., Gabelli Equity and Neuberger Berman go up and down completely randomly.

Pair Corralation between Gabelli Equity and Neuberger Berman

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 0.63 times more return on investment than Neuberger Berman. However, Gabelli Equity Trust is 1.6 times less risky than Neuberger Berman. It trades about 0.15 of its potential returns per unit of risk. Neuberger Berman Re is currently generating about -0.07 per unit of risk. If you would invest  537.00  in Gabelli Equity Trust on September 12, 2024 and sell it today you would earn a total of  38.00  from holding Gabelli Equity Trust or generate 7.08% return on investment over 90 days.

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

Gabelli Equity Trust  vs.  Neuberger Berman Re

Gabelli Equity Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Gabelli Equity 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 very healthy basic indicators, Neuberger Berman is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Equity and Neuberger Berman

The main advantage of trading using opposite Gabelli Equity and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity 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 Gabelli Equity Trust 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.