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 Municipal and Neuberger Berman Intermediate, 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

0.91

Correlation Coefficient

Eaton Vance  Neuberger Berman

Almost no diversification

The 3 months correlation between Eaton and Neuberger is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal and Neuberger Berman Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Int 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 Municipal 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 Int 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

Assuming the 90 days horizon Eaton Vance Municipal is expected to generate 0.41 times more return on investment than Neuberger Berman. However, Eaton Vance Municipal is 2.43 times less risky than Neuberger Berman. It trades about -0.09 of its potential returns per unit of risk. Neuberger Berman Intermediate is currently generating about -0.12 per unit of risk. If you would invest  1,896  in Eaton Vance Municipal on September 15, 2024 and sell it today you would lose (18.00) from holding Eaton Vance Municipal or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Eaton Vance Municipal  vs.  Neuberger Berman Intermediate

Eaton Vance Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Neuberger Berman Int

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Municipal and Neuberger Berman Intermediate 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.