Correlation Between Vanguard Developed and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Vanguard Developed 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 Vanguard Developed and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Developed Markets and Cohen Steers Real, you can compare the effects of market volatilities on Vanguard Developed 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 Vanguard Developed with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Developed and Cohen Steers.
Diversification Opportunities for Vanguard Developed and Cohen Steers
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VANGUARD and Cohen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Developed Markets 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 Vanguard Developed 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 Vanguard Developed Markets 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 Vanguard Developed i.e., Vanguard Developed and Cohen Steers go up and down completely randomly.
Pair Corralation between Vanguard Developed and Cohen Steers
Assuming the 90 days horizon Vanguard Developed is expected to generate 1.02 times less return on investment than Cohen Steers. In addition to that, Vanguard Developed is 1.41 times more volatile than Cohen Steers Real. It trades about 0.04 of its total potential returns per unit of risk. Cohen Steers Real is currently generating about 0.06 per unit of volatility. If you would invest 928.00 in Cohen Steers Real on August 31, 2024 and sell it today you would earn a total of 129.00 from holding Cohen Steers Real or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Developed Markets vs. Cohen Steers Real
Performance |
| Timeline |
| Vanguard Developed |
| Cohen Steers Real |
Vanguard Developed and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Developed and Cohen Steers
The main advantage of trading using opposite Vanguard Developed and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Developed 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.| Vanguard Developed vs. Vanguard Emerging Markets | Vanguard Developed vs. Vanguard Small Cap Index | Vanguard Developed vs. Vanguard Total Bond | Vanguard Developed vs. Vanguard Mid Cap Index |
| Cohen Steers vs. Siit Emerging Markets | Cohen Steers vs. Vanguard Developed Markets | Cohen Steers vs. Locorr Market Trend | Cohen Steers vs. Barings Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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