Correlation Between Neuberger Berman and John Hancock
Can any of the company-specific risk be diversified away by investing in both Neuberger Berman and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neuberger Berman Strategic and John Hancock Income, you can compare the effects of market volatilities on Neuberger Berman and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuberger Berman and John Hancock.
Diversification Opportunities for Neuberger Berman and John Hancock
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Neuberger and John is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Strategic and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Me 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 Strategic are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Me has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and John Hancock go up and down completely randomly.
Pair Corralation between Neuberger Berman and John Hancock
Assuming the 90 days horizon Neuberger Berman Strategic is expected to generate 1.17 times more return on investment than John Hancock. However, Neuberger Berman is 1.17 times more volatile than John Hancock Income. It trades about -0.05 of its potential returns per unit of risk. John Hancock Income is currently generating about -0.06 per unit of risk. If you would invest 968.00 in Neuberger Berman Strategic on January 26, 2024 and sell it today you would lose (10.00) from holding Neuberger Berman Strategic or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neuberger Berman Strategic vs. John Hancock Income
Performance |
| Timeline |
| Neuberger Berman Str |
| John Hancock Me |
Neuberger Berman and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuberger Berman and John Hancock
The main advantage of trading using opposite Neuberger Berman and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Neuberger Berman vs. Merck Company | Neuberger Berman vs. Chevron Corp | Neuberger Berman vs. MagnaChip Semiconductor |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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