Correlation Between Fidelity International and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Fidelity International 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 Fidelity International and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Real and Cohen Steers Realty, you can compare the effects of market volatilities on Fidelity International 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 Fidelity International with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Cohen Steers.
Diversification Opportunities for Fidelity International and Cohen Steers
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Cohen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Real and Cohen Steers Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Realty and Fidelity International 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 Fidelity International Real 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 Realty has no effect on the direction of Fidelity International i.e., Fidelity International and Cohen Steers go up and down completely randomly.
Pair Corralation between Fidelity International and Cohen Steers
Assuming the 90 days horizon Fidelity International Real is expected to under-perform the Cohen Steers. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity International Real is 1.32 times less risky than Cohen Steers. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Cohen Steers Realty is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,033 in Cohen Steers Realty on September 1, 2024 and sell it today you would earn a total of 194.00 from holding Cohen Steers Realty or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Real vs. Cohen Steers Realty
Performance |
| Timeline |
| Fidelity International |
| Cohen Steers Realty |
Fidelity International and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Cohen Steers
The main advantage of trading using opposite Fidelity International and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International 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.The idea behind Fidelity International Real and Cohen Steers Realty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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