Correlation Between Caterpillar and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Caterpillar 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 Caterpillar and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Neuberger Berman New, you can compare the effects of market volatilities on Caterpillar 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 Caterpillar with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Neuberger Berman.
Diversification Opportunities for Caterpillar and Neuberger Berman
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and Neuberger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Neuberger Berman New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman New and Caterpillar 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 Caterpillar 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 New has no effect on the direction of Caterpillar i.e., Caterpillar and Neuberger Berman go up and down completely randomly.
Pair Corralation between Caterpillar and Neuberger Berman
If you would invest 37,620 in Caterpillar on September 1, 2024 and sell it today you would earn a total of 2,991 from holding Caterpillar or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Caterpillar vs. Neuberger Berman New
Performance |
| Timeline |
| Caterpillar |
| Neuberger Berman New |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Neuberger Berman
The main advantage of trading using opposite Caterpillar and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar 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.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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