Correlation Between Third Avenue and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Third Avenue 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 Third Avenue and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Third Avenue Value and Cohen Steers Realty, you can compare the effects of market volatilities on Third Avenue 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 Third Avenue with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Avenue and Cohen Steers.
Diversification Opportunities for Third Avenue and Cohen Steers
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Third and Cohen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Third Avenue Value 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 Third Avenue 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 Third Avenue Value 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 Third Avenue i.e., Third Avenue and Cohen Steers go up and down completely randomly.
Pair Corralation between Third Avenue and Cohen Steers
Assuming the 90 days horizon Third Avenue Value is expected to under-perform the Cohen Steers. But the mutual fund apears to be less risky and, when comparing its historical volatility, Third Avenue Value is 1.21 times less risky than Cohen Steers. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Cohen Steers Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,190 in Cohen Steers Realty on August 29, 2024 and sell it today you would earn a total of 71.00 from holding Cohen Steers Realty or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Third Avenue Value vs. Cohen Steers Realty
Performance |
| Timeline |
| Third Avenue Value |
| Cohen Steers Realty |
Third Avenue and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Third Avenue and Cohen Steers
The main advantage of trading using opposite Third Avenue and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Third Avenue 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.| Third Avenue vs. Ab Small Cap | Third Avenue vs. T Rowe Price | Third Avenue vs. Artisan Thematic Fund | Third Avenue vs. Small Cap Stock |
| Cohen Steers vs. Commonwealth Global Fund | Cohen Steers vs. HUMANA INC | Cohen Steers vs. Aquagold International | Cohen Steers vs. Barloworld Ltd ADR |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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