Correlation Between Smallcap Fund and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Smallcap Fund 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 Fund 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 Fund Fka and Cohen Steers Preferred, you can compare the effects of market volatilities on Smallcap Fund 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 Fund with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Fund and Cohen Steers.
Diversification Opportunities for Smallcap Fund and Cohen Steers
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smallcap and Cohen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka 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 Smallcap Fund 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 Fund Fka 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 Smallcap Fund i.e., Smallcap Fund and Cohen Steers go up and down completely randomly.
Pair Corralation between Smallcap Fund and Cohen Steers
Assuming the 90 days horizon Smallcap Fund Fka is expected to generate 3.95 times more return on investment than Cohen Steers. However, Smallcap Fund is 3.95 times more volatile than Cohen Steers Preferred. It trades about 0.2 of its potential returns per unit of risk. Cohen Steers Preferred is currently generating about 0.03 per unit of risk. If you would invest 2,537 in Smallcap Fund Fka on November 3, 2024 and sell it today you would earn a total of 111.00 from holding Smallcap Fund Fka or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Fund Fka vs. Cohen Steers Preferred
Performance |
| Timeline |
| Smallcap Fund Fka |
| Cohen Steers Preferred |
Smallcap Fund and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Fund and Cohen Steers
The main advantage of trading using opposite Smallcap Fund and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund 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 Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index | Smallcap Fund vs. Vanguard Small Cap Index |
| Cohen Steers vs. Bbh Intermediate Municipal | Cohen Steers vs. Blrc Sgy Mnp | Cohen Steers vs. Morningstar Municipal Bond | Cohen Steers vs. Gamco Global Telecommunications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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