Correlation Between Nuveen California and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Nuveen California 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 Nuveen California and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen California Select and Cohen Steers Total, you can compare the effects of market volatilities on Nuveen California 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 Nuveen California with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Cohen Steers.
Diversification Opportunities for Nuveen California and Cohen Steers
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nuveen and Cohen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Cohen Steers Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Total and Nuveen California 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 Nuveen California Select 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 Total has no effect on the direction of Nuveen California i.e., Nuveen California and Cohen Steers go up and down completely randomly.
Pair Corralation between Nuveen California and Cohen Steers
Considering the 90-day investment horizon Nuveen California is expected to generate 2.87 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Nuveen California Select is 1.3 times less risky than Cohen Steers. It trades about 0.02 of its potential returns per unit of risk. Cohen Steers Total is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,057 in Cohen Steers Total on September 3, 2024 and sell it today you would earn a total of 259.00 from holding Cohen Steers Total or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. Cohen Steers Total
Performance |
| Timeline |
| Nuveen California Select |
| Cohen Steers Total |
Nuveen California and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Cohen Steers
The main advantage of trading using opposite Nuveen California and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California 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.| Nuveen California vs. Eaton Vance National | Nuveen California vs. Invesco High Income | Nuveen California vs. Blackrock Muniholdings Ny | Nuveen California vs. MFS Investment Grade |
| Cohen Steers vs. Tekla Healthcare Investors | Cohen Steers vs. Tekla Life Sciences | Cohen Steers vs. Cohen Steers Reit | Cohen Steers vs. XAI Octagon Floating |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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