Correlation Between Ab Small and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Cohen Steers Realty, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Cohen Steers.
Diversification Opportunities for Ab Small and Cohen Steers
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCYVX and Cohen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Cohen Steers Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Realty and Ab Small 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 Ab Small Cap 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 Realty has no effect on the direction of Ab Small i.e., Ab Small and Cohen Steers go up and down completely randomly.
Pair Corralation between Ab Small and Cohen Steers
Assuming the 90 days horizon Ab Small is expected to generate 1.46 times less return on investment than Cohen Steers. In addition to that, Ab Small is 1.15 times more volatile than Cohen Steers Realty. It trades about 0.03 of its total potential returns per unit of risk. Cohen Steers Realty is currently generating about 0.04 per unit of volatility. If you would invest 5,554 in Cohen Steers Realty on December 9, 2024 and sell it today you would earn a total of 1,228 from holding Cohen Steers Realty or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Cohen Steers Realty
Performance |
| Timeline |
| Ab Small Cap |
| Cohen Steers Realty |
Ab Small and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Cohen Steers
The main advantage of trading using opposite Ab Small and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Pace Smallmedium Value | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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