Correlation Between Cohen Steers and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Fidelity Small 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 Cohen Steers and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Real and Fidelity Small Cap, you can compare the effects of market volatilities on Cohen Steers and Fidelity Small 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 Cohen Steers with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Fidelity Small.
Diversification Opportunities for Cohen Steers and Fidelity Small
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cohen and Fidelity is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Real and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap and Cohen Steers 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 Cohen Steers Real are associated (or correlated) with Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Cohen Steers i.e., Cohen Steers and Fidelity Small go up and down completely randomly.
Pair Corralation between Cohen Steers and Fidelity Small
Assuming the 90 days horizon Cohen Steers Real is expected to under-perform the Fidelity Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Real is 3.06 times less risky than Fidelity Small. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Fidelity Small Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,620 in Fidelity Small Cap on August 29, 2024 and sell it today you would earn a total of 193.00 from holding Fidelity Small Cap or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Real vs. Fidelity Small Cap
Performance |
| Timeline |
| Cohen Steers Real |
| Fidelity Small Cap |
Cohen Steers and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Fidelity Small
The main advantage of trading using opposite Cohen Steers and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Fidelity Small 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 Fidelity Small will offset losses from the drop in Fidelity Small's long position.The idea behind Cohen Steers Real and Fidelity Small Cap 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.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Mid Cap |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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