Correlation Between Cohen Steers and European Equity
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and European Equity 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 European Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Limited and European Equity Closed, you can compare the effects of market volatilities on Cohen Steers and European Equity 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 European Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and European Equity.
Diversification Opportunities for Cohen Steers and European Equity
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cohen and European is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Limited and European Equity Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Equity Closed 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 Limited are associated (or correlated) with European Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Equity Closed has no effect on the direction of Cohen Steers i.e., Cohen Steers and European Equity go up and down completely randomly.
Pair Corralation between Cohen Steers and European Equity
Considering the 90-day investment horizon Cohen Steers is expected to generate 4.38 times less return on investment than European Equity. In addition to that, Cohen Steers is 1.01 times more volatile than European Equity Closed. It trades about 0.03 of its total potential returns per unit of risk. European Equity Closed is currently generating about 0.12 per unit of volatility. If you would invest 827.00 in European Equity Closed on October 22, 2024 and sell it today you would earn a total of 12.00 from holding European Equity Closed or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Limited vs. European Equity Closed
Performance |
| Timeline |
| Cohen Steers Limited |
| European Equity Closed |
Cohen Steers and European Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and European Equity
The main advantage of trading using opposite Cohen Steers and European Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, European Equity 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 European Equity will offset losses from the drop in European Equity's long position.| Cohen Steers vs. Tekla Healthcare Investors | Cohen Steers vs. Tekla Healthcare Opportunities | Cohen Steers vs. Eaton Vance Tax | Cohen Steers vs. Tekla World Healthcare |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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