Correlation Between Commodities Strategy and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Cohen Steers Limited, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Cohen Steers.
Diversification Opportunities for Commodities Strategy and Cohen Steers
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commodities and Cohen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Cohen Steers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Limited and Commodities Strategy 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 Commodities Strategy Fund 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 Limited has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Cohen Steers go up and down completely randomly.
Pair Corralation between Commodities Strategy and Cohen Steers
Assuming the 90 days horizon Commodities Strategy is expected to generate 1.77 times less return on investment than Cohen Steers. In addition to that, Commodities Strategy is 1.47 times more volatile than Cohen Steers Limited. It trades about 0.04 of its total potential returns per unit of risk. Cohen Steers Limited is currently generating about 0.11 per unit of volatility. If you would invest 1,741 in Cohen Steers Limited on November 9, 2024 and sell it today you would earn a total of 355.00 from holding Cohen Steers Limited or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Cohen Steers Limited
Performance |
| Timeline |
| Commodities Strategy |
| Cohen Steers Limited |
Commodities Strategy and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Cohen Steers
The main advantage of trading using opposite Commodities Strategy and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.The idea behind Commodities Strategy Fund and Cohen Steers Limited 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.
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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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