Correlation Between Cohen Steers and Western Asset
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Reit and Western Asset Emerging, you can compare the effects of market volatilities on Cohen Steers and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Western Asset.
Diversification Opportunities for Cohen Steers and Western Asset
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cohen and Western is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Reit and Western Asset Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Emerging 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 Reit are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Emerging has no effect on the direction of Cohen Steers i.e., Cohen Steers and Western Asset go up and down completely randomly.
Pair Corralation between Cohen Steers and Western Asset
Considering the 90-day investment horizon Cohen Steers Reit is expected to generate 1.62 times more return on investment than Western Asset. However, Cohen Steers is 1.62 times more volatile than Western Asset Emerging. It trades about 0.07 of its potential returns per unit of risk. Western Asset Emerging is currently generating about -0.04 per unit of risk. If you would invest 2,262 in Cohen Steers Reit on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Cohen Steers Reit or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Reit vs. Western Asset Emerging
Performance |
| Timeline |
| Cohen Steers Reit |
| Western Asset Emerging |
Cohen Steers and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Western Asset
The main advantage of trading using opposite Cohen Steers and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Cohen Steers vs. Cohen And Steers | Cohen Steers vs. Cohen Steers Total | Cohen Steers vs. Reaves Utility If | Cohen Steers vs. BlackRock Science Tech |
| Western Asset vs. Tekla Healthcare Investors | Western Asset vs. Tekla Life Sciences | Western Asset vs. Cohen Steers Reit | Western Asset vs. XAI Octagon Floating |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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