Correlation Between Preferred Securities and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Preferred Securities 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 Preferred Securities and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preferred Securities Fund and Cohen Steers Preferred, you can compare the effects of market volatilities on Preferred Securities 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 Preferred Securities with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preferred Securities and Cohen Steers.
Diversification Opportunities for Preferred Securities and Cohen Steers
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PREFERRED and Cohen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Preferred Securities Fund and Cohen Steers Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Preferred and Preferred Securities 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 Preferred Securities 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 Preferred has no effect on the direction of Preferred Securities i.e., Preferred Securities and Cohen Steers go up and down completely randomly.
Pair Corralation between Preferred Securities and Cohen Steers
Assuming the 90 days horizon Preferred Securities is expected to generate 1.12 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Preferred Securities Fund is 1.3 times less risky than Cohen Steers. It trades about 0.26 of its potential returns per unit of risk. Cohen Steers Preferred is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,178 in Cohen Steers Preferred on September 1, 2024 and sell it today you would earn a total of 59.00 from holding Cohen Steers Preferred or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Preferred Securities Fund vs. Cohen Steers Preferred
Performance |
| Timeline |
| Preferred Securities |
| Cohen Steers Preferred |
Preferred Securities and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Preferred Securities and Cohen Steers
The main advantage of trading using opposite Preferred Securities and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preferred Securities 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.| Preferred Securities vs. Qs Large Cap | Preferred Securities vs. M Large Cap | Preferred Securities vs. Americafirst Large Cap | Preferred Securities vs. John Hancock Investment |
| Cohen Steers vs. Vanguard Financials Index | Cohen Steers vs. 1919 Financial Services | Cohen Steers vs. Angel Oak Financial | Cohen Steers vs. John Hancock Financial |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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