Correlation Between Cohen Steers and Vanguard Small-cap
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Vanguard Small-cap 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 Vanguard Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Intl and Vanguard Small Cap Index, you can compare the effects of market volatilities on Cohen Steers and Vanguard Small-cap 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 Vanguard Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Vanguard Small-cap.
Diversification Opportunities for Cohen Steers and Vanguard Small-cap
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cohen and VANGUARD is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Intl and Vanguard Small Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Intl are associated (or correlated) with Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Cohen Steers i.e., Cohen Steers and Vanguard Small-cap go up and down completely randomly.
Pair Corralation between Cohen Steers and Vanguard Small-cap
Assuming the 90 days horizon Cohen Steers Intl is expected to under-perform the Vanguard Small-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Intl is 1.62 times less risky than Vanguard Small-cap. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Vanguard Small Cap Index is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 32,837 in Vanguard Small Cap Index on August 25, 2024 and sell it today you would earn a total of 1,701 from holding Vanguard Small Cap Index or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Intl vs. Vanguard Small Cap Index
Performance |
| Timeline |
| Cohen Steers Intl |
| Vanguard Small Cap |
Cohen Steers and Vanguard Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Vanguard Small-cap
The main advantage of trading using opposite Cohen Steers and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Vanguard Small-cap 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 Vanguard Small-cap will offset losses from the drop in Vanguard Small-cap's long position.| Cohen Steers vs. Omni Small Cap Value | Cohen Steers vs. Baird Smallmid Cap | Cohen Steers vs. The Hartford Small | Cohen Steers vs. Vanguard Small Cap Index |
| Vanguard Small-cap vs. Vanguard Small Cap Index | Vanguard Small-cap vs. Vanguard Small Cap Index | Vanguard Small-cap vs. Vanguard Small Cap Index | Vanguard Small-cap vs. Fidelity Small Cap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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