Correlation Between Dow Jones and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Cohen Steers Real, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Cohen Steers.
Diversification Opportunities for Dow Jones and Cohen Steers
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Cohen is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Dow Jones 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 Dow Jones Industrial 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 Real has no effect on the direction of Dow Jones i.e., Dow Jones and Cohen Steers go up and down completely randomly.
Pair Corralation between Dow Jones and Cohen Steers
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.73 times more return on investment than Cohen Steers. However, Dow Jones is 1.73 times more volatile than Cohen Steers Real. It trades about 0.37 of its potential returns per unit of risk. Cohen Steers Real is currently generating about 0.1 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Cohen Steers Real
Performance |
| Timeline |
Dow Jones and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Cohen Steers Real
Pair trading matchups for Cohen Steers
Pair Trading with Dow Jones and Cohen Steers
The main advantage of trading using opposite Dow Jones and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Cohen Steers vs. Fidelity Advisor Financial | Cohen Steers vs. Transamerica Financial Life | Cohen Steers vs. Goldman Sachs Financial | Cohen Steers vs. Vanguard Financials Index |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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