Correlation Between Oil Gas and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Cohen Steers Mlp, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Cohen Steers.
Diversification Opportunities for Oil Gas and Cohen Steers
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oil and Cohen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Cohen Steers Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Mlp and Oil Gas 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 Oil Gas Ultrasector 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 Mlp has no effect on the direction of Oil Gas i.e., Oil Gas and Cohen Steers go up and down completely randomly.
Pair Corralation between Oil Gas and Cohen Steers
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 1.87 times more return on investment than Cohen Steers. However, Oil Gas is 1.87 times more volatile than Cohen Steers Mlp. It trades about 0.52 of its potential returns per unit of risk. Cohen Steers Mlp is currently generating about 0.47 per unit of risk. If you would invest 3,282 in Oil Gas Ultrasector on October 26, 2024 and sell it today you would earn a total of 437.00 from holding Oil Gas Ultrasector or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Cohen Steers Mlp
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Cohen Steers Mlp |
Oil Gas and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Cohen Steers
The main advantage of trading using opposite Oil Gas and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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