Correlation Between Cohen Steers and Preferred Securities
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Preferred Securities 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 Preferred Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Preferred and Preferred Securities Fund, you can compare the effects of market volatilities on Cohen Steers and Preferred Securities 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 Preferred Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Preferred Securities.
Diversification Opportunities for Cohen Steers and Preferred Securities
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Cohen and Preferred is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Preferred and Preferred Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Securities 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 Preferred are associated (or correlated) with Preferred Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Securities has no effect on the direction of Cohen Steers i.e., Cohen Steers and Preferred Securities go up and down completely randomly.
Pair Corralation between Cohen Steers and Preferred Securities
Assuming the 90 days horizon Cohen Steers Preferred is expected to generate 0.82 times more return on investment than Preferred Securities. However, Cohen Steers Preferred is 1.22 times less risky than Preferred Securities. It trades about -0.11 of its potential returns per unit of risk. Preferred Securities Fund is currently generating about -0.14 per unit of risk. If you would invest 1,244 in Cohen Steers Preferred on August 24, 2024 and sell it today you would lose (4.00) from holding Cohen Steers Preferred or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Preferred vs. Preferred Securities Fund
Performance |
| Timeline |
| Cohen Steers Preferred |
| Preferred Securities |
Cohen Steers and Preferred Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Preferred Securities
The main advantage of trading using opposite Cohen Steers and Preferred Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Preferred Securities 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 Preferred Securities will offset losses from the drop in Preferred Securities' long position.| Cohen Steers vs. Short Oil Gas | Cohen Steers vs. Franklin Natural Resources | Cohen Steers vs. Oil Gas Ultrasector | Cohen Steers vs. Calvert Global Energy |
| Preferred Securities vs. Guggenheim Rbp Large Cap | Preferred Securities vs. William Blair Large | Preferred Securities vs. Jhancock Disciplined Value | Preferred Securities vs. Goldman Sachs Large |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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