Correlation Between Pace Large and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Pace Large 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 Pace Large and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Large Growth and Cohen Steers Realty, you can compare the effects of market volatilities on Pace Large 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 Pace Large with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Large and Cohen Steers.
Diversification Opportunities for Pace Large and Cohen Steers
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Cohen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pace Large Growth and Cohen Steers Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Realty and Pace Large 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 Pace Large Growth 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 Realty has no effect on the direction of Pace Large i.e., Pace Large and Cohen Steers go up and down completely randomly.
Pair Corralation between Pace Large and Cohen Steers
Assuming the 90 days horizon Pace Large Growth is expected to under-perform the Cohen Steers. In addition to that, Pace Large is 2.34 times more volatile than Cohen Steers Realty. It trades about -0.24 of its total potential returns per unit of risk. Cohen Steers Realty is currently generating about -0.31 per unit of volatility. If you would invest 6,980 in Cohen Steers Realty on October 9, 2024 and sell it today you would lose (486.00) from holding Cohen Steers Realty or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Large Growth vs. Cohen Steers Realty
Performance |
| Timeline |
| Pace Large Growth |
| Cohen Steers Realty |
Pace Large and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Large and Cohen Steers
The main advantage of trading using opposite Pace Large and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Large 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.| Pace Large vs. Aqr Global Macro | Pace Large vs. Qs Global Equity | Pace Large vs. Asg Global Alternatives | Pace Large vs. Ab Global Bond |
| Cohen Steers vs. Realty Income | Cohen Steers vs. Dynex Capital | Cohen Steers vs. First Industrial Realty | Cohen Steers vs. Healthcare Realty Trust |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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