Correlation Between Neuberger Berman and Putnam Convertible

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

By analyzing existing cross correlation between Neuberger Berman Long and Putnam Convertible Securities, you can compare the effects of market volatilities on Neuberger Berman and Putnam Convertible 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 Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and Putnam Convertible.

Diversification Opportunities for Neuberger Berman and Putnam Convertible

0.84

Correlation Coefficient

Neuberger Berman  Putnam Convertible

Very poor diversification

The 3 months correlation between Neuberger and Putnam is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Long and Putnam Convertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible 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 Long are associated (or correlated) with Putnam Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Convertible has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Putnam Convertible go up and down completely randomly.

Pair Corralation between Neuberger Berman and Putnam Convertible

Assuming the 90 days horizon Neuberger Berman is expected to generate 2.0 times less return on investment than Putnam Convertible. But when comparing it to its historical volatility, Neuberger Berman Long is 2.03 times less risky than Putnam Convertible. It trades about 0.17 of its potential returns per unit of risk. Putnam Convertible Securities is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,675  in Putnam Convertible Securities on June 28, 2025 and sell it today you would earn a total of  144.00  from holding Putnam Convertible Securities or generate 5.38% return on investment over 90 days.

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

Neuberger Berman Long  vs.  Putnam Convertible Securities

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 13 (%) 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.

Putnam Convertible

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Convertible Securities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Convertible 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 Putnam Convertible

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

The idea behind Neuberger Berman Long and Putnam Convertible Securities 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.