Correlation Between Cohen Steers and Voya Index

Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Voya Index 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 Steers and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cohen Steers Prfrd and Voya Index Solution, you can compare the effects of market volatilities on Cohen Steers and Voya Index 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 Steers with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Voya Index.

Diversification Opportunities for Cohen Steers and Voya Index

0.86

Correlation Coefficient

Cohen Steers  Voya Index

Very poor diversification

The 3 months correlation between Cohen and Voya is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Prfrd and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Cohen Steers 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 Steers Prfrd are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Cohen Steers i.e., Cohen Steers and Voya Index go up and down completely randomly.

Pair Corralation between Cohen Steers and Voya Index

Assuming the 90 days horizon Cohen Steers Prfrd is expected to generate 0.57 times more return on investment than Voya Index. However, Cohen Steers Prfrd is 1.77 times less risky than Voya Index. It trades about 0.17 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.07 per unit of risk. If you would invest  1,182  in Cohen Steers Prfrd on February 28, 2024 and sell it today you would earn a total of  25.00  from holding Cohen Steers Prfrd or generate 2.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Cohen Steers Prfrd  vs.  Voya Index Solution

Cohen Steers Prfrd

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Prfrd are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Index Solution

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Solution are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cohen Steers and Voya Index

The main advantage of trading using opposite Cohen Steers and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index's long position.

The idea behind Cohen Steers Prfrd and Voya Index Solution pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.