Correlation Between Neuberger Berman and Cohen Steers

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

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

Diversification Opportunities for Neuberger Berman and Cohen Steers

0.47

Correlation Coefficient

Neuberger Berman  Cohen Steers

Very weak diversification

The 3 months correlation between Neuberger and Cohen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neuberger Berman Re and Cohen Steers Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Reit 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 Re are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Reit has no effect on the direction of Neuberger Berman i.e., Neuberger Berman and Cohen Steers go up and down completely randomly.

Pair Corralation between Neuberger Berman and Cohen Steers

Considering the 90-day investment horizon Neuberger Berman Re is expected to generate 1.2 times more return on investment than Cohen Steers. However, Neuberger Berman is 1.2 times more volatile than Cohen Steers Reit. It trades about 0.13 of its potential returns per unit of risk. Cohen Steers Reit is currently generating about 0.12 per unit of risk. If you would invest  271.00  in Neuberger Berman Re on February 14, 2024 and sell it today you would earn a total of  63.00  from holding Neuberger Berman Re or generate 23.25% return on investment over 90 days.

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

Neuberger Berman Re  vs.  Cohen Steers Reit

Neuberger Berman

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Re are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Neuberger Berman is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cohen Steers Reit

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Reit are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Neuberger Berman and Cohen Steers

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

The idea behind Neuberger Berman Re and Cohen Steers Reit 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.