Correlation Between Merrill Lynch and Neuberger Berman

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

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

Diversification Opportunities for Merrill Lynch and Neuberger Berman

0.0

Correlation Coefficient

Merrill Lynch  Neuberger Berman

Pay attention - limited upside

The 3 months correlation between Merrill and Neuberger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merrill Lynch Depositor 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 Merrill Lynch 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 Merrill Lynch Depositor 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 Merrill Lynch i.e., Merrill Lynch and Neuberger Berman go up and down completely randomly.

Pair Corralation between Merrill Lynch and Neuberger Berman

If you would invest  2,502  in Merrill Lynch Depositor on December 20, 2024 and sell it today you would earn a total of  68.00  from holding Merrill Lynch Depositor or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Merrill Lynch Depositor  vs.  Neuberger Berman California

Merrill Lynch Depositor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Merrill Lynch Depositor are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Merrill Lynch is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 Merrill Lynch and Neuberger Berman

The main advantage of trading using opposite Merrill Lynch and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merrill Lynch 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 Merrill Lynch Depositor 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.