Correlation Between Western Asset and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Cohen Steers Global, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Cohen Steers.
Diversification Opportunities for Western Asset and Cohen Steers
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Cohen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation 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 Western Asset 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 Western Asset Inflation 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 Western Asset i.e., Western Asset and Cohen Steers go up and down completely randomly.
Pair Corralation between Western Asset and Cohen Steers
Assuming the 90 days horizon Western Asset is expected to generate 3.34 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Western Asset Inflation is 2.44 times less risky than Cohen Steers. It trades about 0.09 of its potential returns per unit of risk. Cohen Steers Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,938 in Cohen Steers Global on September 3, 2024 and sell it today you would earn a total of 676.00 from holding Cohen Steers Global or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Cohen Steers Global
Performance |
| Timeline |
| Western Asset Inflation |
| Cohen Steers Global |
Western Asset and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Cohen Steers
The main advantage of trading using opposite Western Asset and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Blackrock Sm Cap | Western Asset vs. Principal Lifetime Hybrid | Western Asset vs. Adams Diversified Equity | Western Asset vs. Lord Abbett Diversified |
| Cohen Steers vs. Qs Large Cap | Cohen Steers vs. Qs Global Equity | Cohen Steers vs. Touchstone Large Cap | Cohen Steers vs. Volumetric Fund Volumetric |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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