Correlation Between Gmo Core and Neuberger Berman

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

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

Diversification Opportunities for Gmo Core and Neuberger Berman

0.82

Correlation Coefficient

Gmo Core  Neuberger Berman

Very poor diversification

The 3 months correlation between Gmo and Neuberger is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus and Neuberger Berman Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Long and Gmo Core 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 Gmo E Plus 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 Long has no effect on the direction of Gmo Core i.e., Gmo Core and Neuberger Berman go up and down completely randomly.

Pair Corralation between Gmo Core and Neuberger Berman

Assuming the 90 days horizon Gmo Core is expected to generate 1.05 times less return on investment than Neuberger Berman. In addition to that, Gmo Core is 1.1 times more volatile than Neuberger Berman Long. It trades about 0.16 of its total potential returns per unit of risk. Neuberger Berman Long is currently generating about 0.18 per unit of volatility. If you would invest  1,935  in Neuberger Berman Long on May 27, 2025 and sell it today you would earn a total of  54.00  from holding Neuberger Berman Long or generate 2.79% return on investment over 90 days.

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

Gmo E Plus  vs.  Neuberger Berman Long

Gmo E Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo E Plus are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gmo Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Long

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Long are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward 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 Gmo Core and Neuberger Berman

The main advantage of trading using opposite Gmo Core and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Core 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 Gmo E Plus and Neuberger Berman Long 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 Transaction History module to view history of all your transactions and understand their impact on performance.