Correlation Between Emerging Markets and Neuberger Berman

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

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

Diversification Opportunities for Emerging Markets and Neuberger Berman

0.34

Correlation Coefficient

Emerging Markets  Neuberger Berman

Weak diversification

The 3 months correlation between Emerging and Neuberger is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and Neuberger Berman Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Focus and Emerging Markets 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 Emerging Markets Portfolio 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 Focus has no effect on the direction of Emerging Markets i.e., Emerging Markets and Neuberger Berman go up and down completely randomly.

Pair Corralation between Emerging Markets and Neuberger Berman

Assuming the 90 days horizon Emerging Markets is expected to generate 12.26 times less return on investment than Neuberger Berman. In addition to that, Emerging Markets is 1.26 times more volatile than Neuberger Berman Focus. It trades about 0.01 of its total potential returns per unit of risk. Neuberger Berman Focus is currently generating about 0.17 per unit of volatility. If you would invest  2,872  in Neuberger Berman Focus on September 2, 2024 and sell it today you would earn a total of  227.00  from holding Neuberger Berman Focus or generate 7.9% return on investment over 90 days.

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

Emerging Markets Portfolio  vs.  Neuberger Berman Focus

Emerging Markets Por

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerging Markets Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Emerging Markets is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Focus

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Focus are ranked lower than 13 (%) 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 Emerging Markets and Neuberger Berman

The main advantage of trading using opposite Emerging Markets and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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 Emerging Markets Portfolio and Neuberger Berman Focus 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 CEOs Directory module to screen CEOs from public companies around the world.