Correlation Between Cohen Steers and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Nuveen Preferred 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 Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Preferd and Nuveen Preferred Securities, you can compare the effects of market volatilities on Cohen Steers and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Nuveen Preferred.
Diversification Opportunities for Cohen Steers and Nuveen Preferred
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cohen and Nuveen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Preferd and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec 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 Preferd are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Sec has no effect on the direction of Cohen Steers i.e., Cohen Steers and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Cohen Steers and Nuveen Preferred
Assuming the 90 days horizon Cohen Steers Preferd is expected to under-perform the Nuveen Preferred. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Preferd is 1.41 times less risky than Nuveen Preferred. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Nuveen Preferred Securities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,564 in Nuveen Preferred Securities on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Nuveen Preferred Securities or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cohen Steers Preferd vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Cohen Steers Preferd |
| Nuveen Preferred Sec |
Cohen Steers and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Nuveen Preferred
The main advantage of trading using opposite Cohen Steers and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Cohen Steers vs. Cohen Steers Prfrd | Cohen Steers vs. Cohen Steers Preferred | Cohen Steers vs. Preferred Securities Fund |
| Nuveen Preferred vs. Cohen Steers Prfrd | Nuveen Preferred vs. Cohen Steers Preferd | Nuveen Preferred vs. Cohen Steers Preferred | Nuveen Preferred vs. Preferred Securities Fund |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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