Correlation Between City National and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Neuberger Berman Income, you can compare the effects of market volatilities on City National 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 City National with a short position of Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Neuberger Berman.
Diversification Opportunities for City National and Neuberger Berman
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between City and Neuberger is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Neuberger Berman Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Income and City National 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 City National Rochdale 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 Income has no effect on the direction of City National i.e., City National and Neuberger Berman go up and down completely randomly.
Pair Corralation between City National and Neuberger Berman
Assuming the 90 days horizon City National Rochdale is expected to under-perform the Neuberger Berman. In addition to that, City National is 2.77 times more volatile than Neuberger Berman Income. It trades about -0.22 of its total potential returns per unit of risk. Neuberger Berman Income is currently generating about -0.32 per unit of volatility. If you would invest 774.00 in Neuberger Berman Income on October 7, 2024 and sell it today you would lose (9.00) from holding Neuberger Berman Income or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Neuberger Berman Income
Performance |
| Timeline |
| City National Rochdale |
| Neuberger Berman Income |
City National and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Neuberger Berman
The main advantage of trading using opposite City National and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.| City National vs. Qs Global Equity | City National vs. Wisdomtree Siegel Global | City National vs. Mirova Global Green | City National vs. Kinetics Global Fund |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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