Correlation Between Government Securities and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Government Securities 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 Government Securities and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Government Securities Fund and Cohen Steers Real, you can compare the effects of market volatilities on Government Securities 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 Government Securities with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Government Securities and Cohen Steers.
Diversification Opportunities for Government Securities and Cohen Steers
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Government and Cohen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Government Securities Fund and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Government Securities 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 Government Securities 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 Real has no effect on the direction of Government Securities i.e., Government Securities and Cohen Steers go up and down completely randomly.
Pair Corralation between Government Securities and Cohen Steers
Assuming the 90 days horizon Government Securities is expected to generate 1.62 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Government Securities Fund is 1.74 times less risky than Cohen Steers. It trades about 0.11 of its potential returns per unit of risk. Cohen Steers Real is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,048 in Cohen Steers Real on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Cohen Steers Real or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Government Securities Fund vs. Cohen Steers Real
Performance |
| Timeline |
| Government Securities |
| Cohen Steers Real |
Government Securities and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Government Securities and Cohen Steers
The main advantage of trading using opposite Government Securities and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Government Securities 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.| Government Securities vs. Capital Growth Fund | Government Securities vs. High Income Fund | Government Securities vs. International Fund International | Government Securities vs. Growth Income Fund |
| Cohen Steers vs. Dunham Porategovernment Bond | Cohen Steers vs. Franklin Adjustable Government | Cohen Steers vs. Government Securities Fund | Cohen Steers vs. Dreyfus Government Cash |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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