Correlation Between Neuberger Berman and Bridge Builder

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

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

Diversification Opportunities for Neuberger Berman and Bridge Builder

0.73

Correlation Coefficient

Neuberger Berman  Bridge Builder

Poor diversification

The 3 months correlation between Neuberger and Bridge is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman High and Bridge Builder E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Builder E and Neuberger Berman 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 Neuberger Berman High are associated (or correlated) with Bridge Builder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Builder E has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Bridge Builder go up and down completely randomly.

Pair Corralation between Neuberger Berman and Bridge Builder

Assuming the 90 days horizon Neuberger Berman is expected to generate 1.0 times less return on investment than Bridge Builder. But when comparing it to its historical volatility, Neuberger Berman High is 1.73 times less risky than Bridge Builder. It trades about 0.25 of its potential returns per unit of risk. Bridge Builder E is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  866.00  in Bridge Builder E on May 15, 2025 and sell it today you would earn a total of  23.00  from holding Bridge Builder E or generate 2.66% return on investment over 90 days.

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

Neuberger Berman High  vs.  Bridge Builder E

Neuberger Berman High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman High are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bridge Builder E

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridge Builder E are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bridge Builder is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Neuberger Berman and Bridge Builder

The main advantage of trading using opposite Neuberger Berman and Bridge Builder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Bridge Builder 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 Bridge Builder will offset losses from the drop in Bridge Builder's long position.

The idea behind Neuberger Berman High and Bridge Builder E 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.