Correlation Between Midcap Fund and Neuberger Berman

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

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

Diversification Opportunities for Midcap Fund and Neuberger Berman

0.91

Correlation Coefficient

Midcap Fund  Neuberger Berman

Almost no diversification

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

Pair Corralation between Midcap Fund and Neuberger Berman

Assuming the 90 days horizon Midcap Fund is expected to generate 3.28 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Midcap Fund Class is 1.17 times less risky than Neuberger Berman. It trades about 0.08 of its potential returns per unit of risk. Neuberger Berman Mid is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,691  in Neuberger Berman Mid on May 4, 2025 and sell it today you would earn a total of  243.00  from holding Neuberger Berman Mid or generate 14.37% return on investment over 90 days.

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

Midcap Fund Class  vs.  Neuberger Berman Mid

Midcap Fund Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Fund Class are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Midcap Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neuberger Berman Mid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Mid are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Neuberger Berman showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Midcap Fund and Neuberger Berman

The main advantage of trading using opposite Midcap Fund and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midcap Fund 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 Midcap Fund Class and Neuberger Berman Mid 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.