Correlation Between Small Cap and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value and Cohen Steers Prfrd, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Cohen Steers.
Diversification Opportunities for Small Cap and Cohen Steers
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMALL and Cohen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value 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 Small Cap 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 Small Cap Value 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 Small Cap i.e., Small Cap and Cohen Steers go up and down completely randomly.
Pair Corralation between Small Cap and Cohen Steers
Assuming the 90 days horizon Small Cap Value is expected to generate 3.63 times more return on investment than Cohen Steers. However, Small Cap is 3.63 times more volatile than Cohen Steers Prfrd. It trades about 0.02 of its potential returns per unit of risk. Cohen Steers Prfrd is currently generating about 0.06 per unit of risk. If you would invest 997.00 in Small Cap Value on November 5, 2024 and sell it today you would earn a total of 76.00 from holding Small Cap Value or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Value vs. Cohen Steers Prfrd
Performance |
| Timeline |
| Small Cap Value |
| Cohen Steers Prfrd |
Small Cap and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Cohen Steers
The main advantage of trading using opposite Small Cap and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Value Fund Investor | Small Cap vs. Small Pany Fund | Small Cap vs. Mid Cap Value | Small Cap vs. Equity Income Fund |
| Cohen Steers vs. Gabelli Convertible And | Cohen Steers vs. Columbia Convertible Securities | Cohen Steers vs. Putnam Convertible Securities | Cohen Steers vs. Fidelity Sai Convertible |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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