Correlation Between Cohen Steers and Prudential Government
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Prudential Government 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 Prudential Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Low and Prudential Government Money, you can compare the effects of market volatilities on Cohen Steers and Prudential Government 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 Prudential Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Prudential Government.
Diversification Opportunities for Cohen Steers and Prudential Government
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cohen and Prudential is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Low and Prudential Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Government 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 Low are associated (or correlated) with Prudential Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Government has no effect on the direction of Cohen Steers i.e., Cohen Steers and Prudential Government go up and down completely randomly.
Pair Corralation between Cohen Steers and Prudential Government
Assuming the 90 days horizon Cohen Steers Low is expected to generate 0.79 times more return on investment than Prudential Government. However, Cohen Steers Low is 1.27 times less risky than Prudential Government. It trades about 0.34 of its potential returns per unit of risk. Prudential Government Money is currently generating about 0.12 per unit of risk. If you would invest 906.00 in Cohen Steers Low on September 3, 2024 and sell it today you would earn a total of 43.00 from holding Cohen Steers Low or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Low vs. Prudential Government Money
Performance |
| Timeline |
| Cohen Steers Low |
| Prudential Government |
Cohen Steers and Prudential Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Prudential Government
The main advantage of trading using opposite Cohen Steers and Prudential Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Prudential Government 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 Prudential Government will offset losses from the drop in Prudential Government's long position.| Cohen Steers vs. Prudential Government Money | Cohen Steers vs. Dws Government Money | Cohen Steers vs. Elfun Government Money | Cohen Steers vs. Lord Abbett Emerging |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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