Correlation Between State Street and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Premier and Cohen Steers Global, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Cohen Steers.
Diversification Opportunities for State Street and Cohen Steers
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Cohen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding State Street Premier and Cohen Steers Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Global and State Street 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 State Street Premier 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 Global has no effect on the direction of State Street i.e., State Street and Cohen Steers go up and down completely randomly.
Pair Corralation between State Street and Cohen Steers
Assuming the 90 days horizon State Street Premier is expected to under-perform the Cohen Steers. In addition to that, State Street is 1.48 times more volatile than Cohen Steers Global. It trades about -0.1 of its total potential returns per unit of risk. Cohen Steers Global is currently generating about 0.06 per unit of volatility. If you would invest 5,187 in Cohen Steers Global on November 27, 2024 and sell it today you would earn a total of 38.00 from holding Cohen Steers Global or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Premier vs. Cohen Steers Global
Performance |
| Timeline |
| State Street Premier |
| Cohen Steers Global |
State Street and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Cohen Steers
The main advantage of trading using opposite State Street and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Us Government Securities | State Street vs. Pace Municipal Fixed | State Street vs. Franklin Adjustable Government | State Street vs. Ab Municipal Bond |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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