Correlation Between Inverse Government and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Inverse Government 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 Inverse Government and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Government Long and Cohen Steers Real, you can compare the effects of market volatilities on Inverse Government 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 Inverse Government with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Government and Cohen Steers.
Diversification Opportunities for Inverse Government and Cohen Steers
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inverse and Cohen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Government Long and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Inverse Government 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 Inverse Government Long 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 Real has no effect on the direction of Inverse Government i.e., Inverse Government and Cohen Steers go up and down completely randomly.
Pair Corralation between Inverse Government and Cohen Steers
Assuming the 90 days horizon Inverse Government Long is expected to generate 0.97 times more return on investment than Cohen Steers. However, Inverse Government Long is 1.03 times less risky than Cohen Steers. It trades about 0.11 of its potential returns per unit of risk. Cohen Steers Real is currently generating about 0.05 per unit of risk. If you would invest 17,907 in Inverse Government Long on September 3, 2024 and sell it today you would earn a total of 1,075 from holding Inverse Government Long or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Government Long vs. Cohen Steers Real
Performance |
| Timeline |
| Inverse Government Long |
| Cohen Steers Real |
Inverse Government and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Government and Cohen Steers
The main advantage of trading using opposite Inverse Government and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Government 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.| Inverse Government vs. Dana Large Cap | Inverse Government vs. Pace Large Value | Inverse Government vs. Siit Large Cap | Inverse Government vs. American Mutual Fund |
| Cohen Steers vs. Blackrock Government Bond | Cohen Steers vs. Inverse Government Long | Cohen Steers vs. Virtus Seix Government | Cohen Steers vs. Dreyfus Government Cash |
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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