Correlation Between Real Estate and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Real Estate 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 Real Estate and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Estate Securities and Cohen Steers Realty, you can compare the effects of market volatilities on Real Estate 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 Real Estate with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and Cohen Steers.
Diversification Opportunities for Real Estate and Cohen Steers
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Real and Cohen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Securities 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 Real Estate 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 Real Estate Securities 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 Real Estate i.e., Real Estate and Cohen Steers go up and down completely randomly.
Pair Corralation between Real Estate and Cohen Steers
Assuming the 90 days horizon Real Estate Securities is expected to generate 0.92 times more return on investment than Cohen Steers. However, Real Estate Securities is 1.09 times less risky than Cohen Steers. It trades about 0.1 of its potential returns per unit of risk. Cohen Steers Realty is currently generating about 0.08 per unit of risk. If you would invest 2,949 in Real Estate Securities on August 30, 2024 and sell it today you would earn a total of 62.00 from holding Real Estate Securities or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Estate Securities vs. Cohen Steers Realty
Performance |
| Timeline |
| Real Estate Securities |
| Cohen Steers Realty |
Real Estate and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Estate and Cohen Steers
The main advantage of trading using opposite Real Estate and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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.| Real Estate vs. Realty Income | Real Estate vs. Dynex Capital | Real Estate vs. First Industrial Realty | Real Estate vs. Healthcare Realty Trust |
| Cohen Steers vs. Real Estate Securities | Cohen Steers vs. Real Estate Securities | Cohen Steers vs. Aquagold International | Cohen Steers vs. Morningstar Unconstrained Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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