Correlation Between Cohen Steers and Neuberger Berman

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

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

Diversification Opportunities for Cohen Steers and Neuberger Berman

0.71

Correlation Coefficient

Cohen Steers  Neuberger Berman

Poor diversification

The 3 months correlation between Cohen and Neuberger is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Reit and Neuberger Berman Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman and Cohen Steers 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 Cohen Steers Reit 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 has no effect on the direction of Cohen Steers i.e., Cohen Steers and Neuberger Berman go up and down completely randomly.

Pair Corralation between Cohen Steers and Neuberger Berman

Considering the 90-day investment horizon Cohen Steers is expected to generate 1.45 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Cohen Steers Reit is 1.08 times less risky than Neuberger Berman. It trades about 0.07 of its potential returns per unit of risk. Neuberger Berman Re is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  311.00  in Neuberger Berman Re on September 13, 2024 and sell it today you would earn a total of  54.00  from holding Neuberger Berman Re or generate 17.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cohen Steers Reit  vs.  Neuberger Berman Re

Cohen Steers Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Reit has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Neuberger Berman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neuberger Berman Re has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Cohen Steers and Neuberger Berman

The main advantage of trading using opposite Cohen Steers and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers 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 Cohen Steers Reit and Neuberger Berman Re 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.