Correlation Between Salient Select and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Salient Select 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 Salient Select and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Select Income and Cohen Steers Prfrd, you can compare the effects of market volatilities on Salient Select 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 Salient Select with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Select and Cohen Steers.
Diversification Opportunities for Salient Select and Cohen Steers
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salient and Cohen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Salient Select Income and Cohen Steers Prfrd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Prfrd and Salient Select 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 Salient Select Income 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 Prfrd has no effect on the direction of Salient Select i.e., Salient Select and Cohen Steers go up and down completely randomly.
Pair Corralation between Salient Select and Cohen Steers
Assuming the 90 days horizon Salient Select Income is expected to generate 2.57 times more return on investment than Cohen Steers. However, Salient Select is 2.57 times more volatile than Cohen Steers Prfrd. It trades about 0.08 of its potential returns per unit of risk. Cohen Steers Prfrd is currently generating about 0.14 per unit of risk. If you would invest 1,843 in Salient Select Income on September 12, 2024 and sell it today you would earn a total of 36.00 from holding Salient Select Income or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Select Income vs. Cohen Steers Prfrd
Performance |
| Timeline |
| Salient Select Income |
| Cohen Steers Prfrd |
Salient Select and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Select and Cohen Steers
The main advantage of trading using opposite Salient Select and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Select 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.| Salient Select vs. Salient Select Income | Salient Select vs. Ivy High Income | Salient Select vs. Salient Select Income | Salient Select vs. Salient International Real |
| Cohen Steers vs. John Hancock Financial | Cohen Steers vs. 1919 Financial Services | Cohen Steers vs. Angel Oak Financial | Cohen Steers vs. Fidelity Advisor Financial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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