Correlation Between Fm Investments and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Fm Investments 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 Fm Investments and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fm Investments Large and Cohen Steers Real, you can compare the effects of market volatilities on Fm Investments 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 Fm Investments with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fm Investments and Cohen Steers.
Diversification Opportunities for Fm Investments and Cohen Steers
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IAFLX and Cohen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large 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 Fm Investments 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 Fm Investments Large 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 Fm Investments i.e., Fm Investments and Cohen Steers go up and down completely randomly.
Pair Corralation between Fm Investments and Cohen Steers
Assuming the 90 days horizon Fm Investments Large is expected to generate 1.67 times more return on investment than Cohen Steers. However, Fm Investments is 1.67 times more volatile than Cohen Steers Real. It trades about 0.2 of its potential returns per unit of risk. Cohen Steers Real is currently generating about -0.04 per unit of risk. If you would invest 1,879 in Fm Investments Large on September 13, 2024 and sell it today you would earn a total of 63.00 from holding Fm Investments Large or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fm Investments Large vs. Cohen Steers Real
Performance |
| Timeline |
| Fm Investments Large |
| Cohen Steers Real |
Fm Investments and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fm Investments and Cohen Steers
The main advantage of trading using opposite Fm Investments and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fm Investments 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 Fm Investments Large and Cohen Steers Real 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.| Cohen Steers vs. Lord Abbett Government | Cohen Steers vs. Short Term Government Fund | Cohen Steers vs. Prudential Government Income | Cohen Steers vs. Dreyfus Government Cash |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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