Correlation Between Alpha Architect and Neuberger Berman

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

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

Diversification Opportunities for Alpha Architect and Neuberger Berman

0.91

Correlation Coefficient

Alpha Architect  Neuberger Berman

Almost no diversification

The 3 months correlation between Alpha and Neuberger is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect High and Neuberger Berman ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman ETF and Alpha Architect 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 Alpha Architect High 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 ETF has no effect on the direction of Alpha Architect i.e., Alpha Architect and Neuberger Berman go up and down completely randomly.

Pair Corralation between Alpha Architect and Neuberger Berman

Given the investment horizon of 90 days Alpha Architect is expected to generate 3.05 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Alpha Architect High is 1.66 times less risky than Neuberger Berman. It trades about 0.14 of its potential returns per unit of risk. Neuberger Berman ETF is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,489  in Neuberger Berman ETF on May 10, 2025 and sell it today you would earn a total of  138.00  from holding Neuberger Berman ETF or generate 5.54% return on investment over 90 days.

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

Alpha Architect High  vs.  Neuberger Berman ETF

Alpha Architect High

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Architect High are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Alpha Architect is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Neuberger Berman ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman ETF are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alpha Architect and Neuberger Berman

The main advantage of trading using opposite Alpha Architect and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect 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 Alpha Architect High and Neuberger Berman ETF 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.