Correlation Between Cohen Steers and Northern Global
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Northern Global 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 Northern Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers International and Northern Global Real, you can compare the effects of market volatilities on Cohen Steers and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Northern Global.
Diversification Opportunities for Cohen Steers and Northern Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cohen and Northern is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers International and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real 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 International are associated (or correlated) with Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Cohen Steers i.e., Cohen Steers and Northern Global go up and down completely randomly.
Pair Corralation between Cohen Steers and Northern Global
Assuming the 90 days horizon Cohen Steers International is expected to under-perform the Northern Global. In addition to that, Cohen Steers is 1.18 times more volatile than Northern Global Real. It trades about -0.02 of its total potential returns per unit of risk. Northern Global Real is currently generating about 0.13 per unit of volatility. If you would invest 916.00 in Northern Global Real on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Northern Global Real or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cohen Steers International vs. Northern Global Real
Performance |
| Timeline |
| Cohen Steers Interna |
| Northern Global Real |
Cohen Steers and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Northern Global
The main advantage of trading using opposite Cohen Steers and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| Cohen Steers vs. Cohen Steers Mlp | Cohen Steers vs. Cohen Steers Mlp | Cohen Steers vs. Cohen Steers Mlp | Cohen Steers vs. Cohen Steers Mlp |
| Northern Global vs. Northern Bond Index | Northern Global vs. Northern Arizona Tax Exempt | Northern Global vs. Northern Emerging Markets | Northern Global vs. Northern Fixed Income |
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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