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 California, 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

0.0

Correlation Coefficient

Caterpillar  Neuberger Berman

Pay attention - limited upside

The 3 months correlation between Caterpillar and Neuberger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Neuberger Berman California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Cal 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 Cal 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 (100.00) in Neuberger Berman California on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Neuberger Berman California or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Caterpillar  vs.  Neuberger Berman California

Caterpillar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caterpillar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Neuberger Berman Cal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neuberger Berman California has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Neuberger Berman is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

The idea behind Caterpillar and Neuberger Berman California 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.