Correlation Between Smallcap Growth and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth 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 Smallcap Growth and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Cohen Steers Prfrd, you can compare the effects of market volatilities on Smallcap Growth 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 Smallcap Growth with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Cohen Steers.
Diversification Opportunities for Smallcap Growth and Cohen Steers
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smallcap and Cohen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund 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 Smallcap Growth 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 Smallcap Growth Fund 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 Smallcap Growth i.e., Smallcap Growth and Cohen Steers go up and down completely randomly.
Pair Corralation between Smallcap Growth and Cohen Steers
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 10.37 times more return on investment than Cohen Steers. However, Smallcap Growth is 10.37 times more volatile than Cohen Steers Prfrd. It trades about 0.22 of its potential returns per unit of risk. Cohen Steers Prfrd is currently generating about -0.13 per unit of risk. If you would invest 1,590 in Smallcap Growth Fund on August 26, 2024 and sell it today you would earn a total of 117.00 from holding Smallcap Growth Fund or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Cohen Steers Prfrd
Performance |
| Timeline |
| Smallcap Growth |
| Cohen Steers Prfrd |
Smallcap Growth and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Cohen Steers
The main advantage of trading using opposite Smallcap Growth and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth 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.| Smallcap Growth vs. Small Cap Value Series | Smallcap Growth vs. Pace Smallmedium Value | Smallcap Growth vs. Heartland Value Plus | Smallcap Growth vs. Palm Valley Capital |
| Cohen Steers vs. T Rowe Price | Cohen Steers vs. Smallcap Growth Fund | Cohen Steers vs. Pioneer Fundamental Growth | Cohen Steers vs. Rational Defensive Growth |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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