Correlation Between High-yield Municipal and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal 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 High-yield Municipal and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Cohen Steers Prfrd, you can compare the effects of market volatilities on High-yield Municipal 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 High-yield Municipal with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Cohen Steers.
Diversification Opportunities for High-yield Municipal and Cohen Steers
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High-yield and Cohen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Cohen Steers Prfrd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Prfrd and High-yield Municipal 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 High Yield Municipal Fund 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 Prfrd has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Cohen Steers go up and down completely randomly.
Pair Corralation between High-yield Municipal and Cohen Steers
Assuming the 90 days horizon High-yield Municipal is expected to generate 1.16 times less return on investment than Cohen Steers. In addition to that, High-yield Municipal is 1.61 times more volatile than Cohen Steers Prfrd. It trades about 0.14 of its total potential returns per unit of risk. Cohen Steers Prfrd is currently generating about 0.26 per unit of volatility. If you would invest 1,167 in Cohen Steers Prfrd on September 3, 2024 and sell it today you would earn a total of 72.00 from holding Cohen Steers Prfrd or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Cohen Steers Prfrd
Performance |
| Timeline |
| High Yield Municipal |
| Cohen Steers Prfrd |
High-yield Municipal and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Cohen Steers
The main advantage of trading using opposite High-yield Municipal and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal 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.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| Cohen Steers vs. Virtus Dfa 2040 | Cohen Steers vs. T Rowe Price | Cohen Steers vs. T Rowe Price | Cohen Steers vs. Legg Mason Partners |
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 Stocks Directory module to find actively traded stocks across global markets.
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