Correlation Between Neuberger Berman and Merrill Lynch

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

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

Diversification Opportunities for Neuberger Berman and Merrill Lynch

0.0

Correlation Coefficient

Neuberger Berman  Merrill Lynch

Pay attention - limited upside

The 3 months correlation between Neuberger and Merrill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman California and Merrill Lynch Depositor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch Depositor and Neuberger Berman 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 Neuberger Berman California are associated (or correlated) with Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch Depositor has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Merrill Lynch go up and down completely randomly.

Pair Corralation between Neuberger Berman and Merrill Lynch

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

Neuberger Berman California  vs.  Merrill Lynch Depositor

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.

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.

Pair Trading with Neuberger Berman and Merrill Lynch

The main advantage of trading using opposite Neuberger Berman and Merrill Lynch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuberger Berman position performs unexpectedly, Merrill Lynch 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 Merrill Lynch will offset losses from the drop in Merrill Lynch's long position.

The idea behind Neuberger Berman California and Merrill Lynch Depositor 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.