Correlation Between Nuveen Multi and Neuberger Berman

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

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

Diversification Opportunities for Nuveen Multi and Neuberger Berman

0.63

Correlation Coefficient

Nuveen Multi  Neuberger Berman

Poor diversification

The 3 months correlation between Nuveen and Neuberger is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Multi Mrkt and Neuberger Berman Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman and Nuveen Multi 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 Nuveen Multi Mrkt 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 Nuveen Multi i.e., Nuveen Multi and Neuberger Berman go up and down completely randomly.

Pair Corralation between Nuveen Multi and Neuberger Berman

Considering the 90-day investment horizon Nuveen Multi Mrkt is expected to generate 0.55 times more return on investment than Neuberger Berman. However, Nuveen Multi Mrkt is 1.82 times less risky than Neuberger Berman. It trades about 0.0 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  615.00  in Nuveen Multi Mrkt on September 12, 2024 and sell it today you would lose (1.00) from holding Nuveen Multi Mrkt or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Nuveen Multi Mrkt  vs.  Neuberger Berman Re

Nuveen Multi Mrkt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Multi Mrkt has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy primary indicators, Nuveen Multi is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Multi and Neuberger Berman

The main advantage of trading using opposite Nuveen Multi and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Multi 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 Nuveen Multi Mrkt 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.