Correlation Between Templeton Dragon and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Templeton Dragon 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 Templeton Dragon and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Dragon Closed and Cohen Steers Limited, you can compare the effects of market volatilities on Templeton Dragon 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 Templeton Dragon with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Dragon and Cohen Steers.
Diversification Opportunities for Templeton Dragon and Cohen Steers
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Cohen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Dragon Closed 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 Templeton Dragon 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 Templeton Dragon Closed 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 Templeton Dragon i.e., Templeton Dragon and Cohen Steers go up and down completely randomly.
Pair Corralation between Templeton Dragon and Cohen Steers
Considering the 90-day investment horizon Templeton Dragon Closed is expected to under-perform the Cohen Steers. In addition to that, Templeton Dragon is 2.31 times more volatile than Cohen Steers Limited. It trades about 0.0 of its total potential returns per unit of risk. Cohen Steers Limited is currently generating about 0.1 per unit of volatility. If you would invest 1,606 in Cohen Steers Limited on August 31, 2024 and sell it today you would earn a total of 488.00 from holding Cohen Steers Limited or generate 30.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Templeton Dragon Closed vs. Cohen Steers Limited
Performance |
| Timeline |
| Templeton Dragon Closed |
| Cohen Steers Limited |
Templeton Dragon and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Dragon and Cohen Steers
The main advantage of trading using opposite Templeton Dragon and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Dragon 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.| Templeton Dragon vs. MFS Investment Grade | Templeton Dragon vs. Eaton Vance Municipal | Templeton Dragon vs. DTF Tax Free | Templeton Dragon vs. HUMANA INC |
| Cohen Steers vs. MFS Investment Grade | Cohen Steers vs. Eaton Vance Municipal | Cohen Steers vs. DTF Tax Free | Cohen Steers vs. HUMANA INC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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