Correlation Between Cohen and Investor
Can any of the company-specific risk be diversified away by investing in both Cohen and Investor 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 Cohen and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen and Steers and Investor AB ser, you can compare the effects of market volatilities on Cohen and Investor 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 Cohen with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen and Investor.
Diversification Opportunities for Cohen and Investor
Very poor diversification
The 3 months correlation between Cohen and Investor is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cohen and Steers and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and Cohen 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 Cohen and Steers are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Cohen i.e., Cohen and Investor go up and down completely randomly.
Pair Corralation between Cohen and Investor
Considering the 90-day investment horizon Cohen and Steers is expected to generate 0.73 times more return on investment than Investor. However, Cohen and Steers is 1.36 times less risky than Investor. It trades about -0.3 of its potential returns per unit of risk. Investor AB ser is currently generating about -0.27 per unit of risk. If you would invest 1,951 in Cohen and Steers on January 17, 2024 and sell it today you would lose (88.00) from holding Cohen and Steers or give up 4.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen and Steers vs. Investor AB ser
Performance |
| Timeline |
| Cohen and Steers |
| Investor AB ser |
Cohen and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen and Investor
The main advantage of trading using opposite Cohen and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Cohen vs. John Hancock Tax | Cohen vs. Cohen Steers Tax Advantaged | Cohen vs. Pimco Corporate Income | Cohen vs. Flaherty Crumrine Preferredome |
| Investor vs. Blackrock Muniyield | Investor vs. Blackhawk Growth Corp | Investor vs. Flow Capital Corp | Investor vs. Mount Logan Capital |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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