Correlation Between Global Real and Cohen Steers

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Can any of the company-specific risk be diversified away by investing in both Global Real 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 Global Real and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Real Estate and Cohen Steers Global, you can compare the effects of market volatilities on Global Real 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 Global Real with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Real and Cohen Steers.

Diversification Opportunities for Global Real and Cohen Steers

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Global and Cohen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global Real Estate and Cohen Steers Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Global and Global Real 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 Global Real Estate 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 Global has no effect on the direction of Global Real i.e., Global Real and Cohen Steers go up and down completely randomly.

Pair Corralation between Global Real and Cohen Steers

Assuming the 90 days horizon Global Real is expected to generate 1.07 times less return on investment than Cohen Steers. In addition to that, Global Real is 1.03 times more volatile than Cohen Steers Global. It trades about 0.05 of its total potential returns per unit of risk. Cohen Steers Global is currently generating about 0.05 per unit of volatility. If you would invest  4,777  in Cohen Steers Global on August 31, 2024 and sell it today you would earn a total of  856.00  from holding Cohen Steers Global or generate 17.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.73%
ValuesDaily Returns

Global Real Estate  vs.  Cohen Steers Global

 Performance 
       Timeline  
Global Real Estate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Global Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Cohen Steers Global 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Global are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Real and Cohen Steers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global Real and Cohen Steers

The main advantage of trading using opposite Global Real and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Real 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.
The idea behind Global Real Estate and Cohen Steers Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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