Correlation Between Cohen Steers and Dfa Real

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

By analyzing existing cross correlation between Cohen Steers Real and Dfa Real Estate, you can compare the effects of market volatilities on Cohen Steers and Dfa Real 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 Dfa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Dfa Real.

Diversification Opportunities for Cohen Steers and Dfa Real

0.68

Correlation Coefficient

Cohen Steers  Dfa Real

Poor diversification

The 3 months correlation between Cohen and Dfa is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Real and Dfa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Real Estate 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 Real are associated (or correlated) with Dfa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Real Estate has no effect on the direction of Cohen Steers i.e., Cohen Steers and Dfa Real go up and down completely randomly.

Pair Corralation between Cohen Steers and Dfa Real

Assuming the 90 days horizon Cohen Steers Real is expected to generate 0.97 times more return on investment than Dfa Real. However, Cohen Steers Real is 1.03 times less risky than Dfa Real. It trades about -0.09 of its potential returns per unit of risk. Dfa Real Estate is currently generating about -0.11 per unit of risk. If you would invest  1,505  in Cohen Steers Real on January 20, 2024 and sell it today you would lose (98.00) from holding Cohen Steers Real or give up 6.51% of portfolio value over 90 days.

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

Cohen Steers Real  vs.  Dfa Real Estate

Cohen Steers Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Dfa Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dfa Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Cohen Steers and Dfa Real

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

The idea behind Cohen Steers Real and Dfa Real Estate 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 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.