Correlation Between Jennison Natural and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Cohen Steers Real, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Cohen Steers.
Diversification Opportunities for Jennison Natural and Cohen Steers
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jennison and Cohen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Jennison Natural 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 Jennison Natural Resources 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 Real has no effect on the direction of Jennison Natural i.e., Jennison Natural and Cohen Steers go up and down completely randomly.
Pair Corralation between Jennison Natural and Cohen Steers
Assuming the 90 days horizon Jennison Natural is expected to generate 1.08 times less return on investment than Cohen Steers. In addition to that, Jennison Natural is 2.22 times more volatile than Cohen Steers Real. It trades about 0.02 of its total potential returns per unit of risk. Cohen Steers Real is currently generating about 0.04 per unit of volatility. If you would invest 956.00 in Cohen Steers Real on August 30, 2024 and sell it today you would earn a total of 110.00 from holding Cohen Steers Real or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Cohen Steers Real
Performance |
| Timeline |
| Jennison Natural Res |
| Cohen Steers Real |
Jennison Natural and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Cohen Steers
The main advantage of trading using opposite Jennison Natural and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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 Jennison Natural Resources and Cohen Steers Real 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.| Cohen Steers vs. Dreyfus Natural Resources | Cohen Steers vs. Goldman Sachs Mlp | Cohen Steers vs. Jennison Natural Resources | Cohen Steers vs. Gmo Resources |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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