Correlation Between Empire State and Neuberger Berman

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

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

Diversification Opportunities for Empire State and Neuberger Berman

-0.3

Correlation Coefficient

Empire State  Neuberger Berman

Very good diversification

The 3 months correlation between Empire and Neuberger is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Neuberger Berman Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Real and Empire State 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 Empire State Realty 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 Real has no effect on the direction of Empire State i.e., Empire State and Neuberger Berman go up and down completely randomly.

Pair Corralation between Empire State and Neuberger Berman

Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Neuberger Berman. In addition to that, Empire State is 2.25 times more volatile than Neuberger Berman Real. It trades about -0.15 of its total potential returns per unit of risk. Neuberger Berman Real is currently generating about 0.01 per unit of volatility. If you would invest  1,389  in Neuberger Berman Real on December 21, 2024 and sell it today you would earn a total of  6.00  from holding Neuberger Berman Real or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Empire State Realty  vs.  Neuberger Berman Real

Empire State Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Empire State Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Neuberger Berman Real

Risk-Adjusted Performance

Weak

Over the last 90 days Neuberger Berman Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Empire State and Neuberger Berman

The main advantage of trading using opposite Empire State and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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 Empire State Realty and Neuberger Berman Real 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.