Correlation Between Cohen Steers and Dfa International

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

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

Diversification Opportunities for Cohen Steers and Dfa International

0.17

Correlation Coefficient

Cohen Steers  Dfa International

Average diversification

The 3 months correlation between Cohen and Dfa is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Realty and Dfa International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa International Small 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 Realty are associated (or correlated) with Dfa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa International Small has no effect on the direction of Cohen Steers i.e., Cohen Steers and Dfa International go up and down completely randomly.

Pair Corralation between Cohen Steers and Dfa International

Assuming the 90 days horizon Cohen Steers Realty is expected to under-perform the Dfa International. In addition to that, Cohen Steers is 1.74 times more volatile than Dfa International Small. It trades about -0.17 of its total potential returns per unit of risk. Dfa International Small is currently generating about -0.06 per unit of volatility. If you would invest  2,212  in Dfa International Small on January 24, 2024 and sell it today you would lose (22.00) from holding Dfa International Small or give up 0.99% of portfolio value over 90 days.

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

Cohen Steers Realty  vs.  Dfa International Small

Cohen Steers Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Realty has generated negative risk-adjusted returns adding no value to fund investors. 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.

Dfa International Small

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa International Small are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dfa International 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 Dfa International

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

The idea behind Cohen Steers Realty and Dfa International Small 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..