Correlation Between Aberdeen Total and Cohen Steers

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

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

Diversification Opportunities for Aberdeen Total and Cohen Steers

0.32

Correlation Coefficient

Aberdeen Total  Cohen Steers

Weak diversification

The 3 months correlation between Aberdeen and Cohen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Total Dynamic and Cohen Steers Qualityome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Qualityome and Aberdeen Total 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 Aberdeen Total Dynamic 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 Qualityome has no effect on the direction of Aberdeen Total i.e., Aberdeen Total and Cohen Steers go up and down completely randomly.

Pair Corralation between Aberdeen Total and Cohen Steers

Considering the 90-day investment horizon Aberdeen Total is expected to generate 1.35 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Aberdeen Total Dynamic is 1.88 times less risky than Cohen Steers. It trades about 0.07 of its potential returns per unit of risk. Cohen Steers Qualityome is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,348  in Cohen Steers Qualityome on September 3, 2024 and sell it today you would earn a total of  45.00  from holding Cohen Steers Qualityome or generate 3.34% return on investment over 90 days.

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

Aberdeen Total Dynamic  vs.  Cohen Steers Qualityome

Aberdeen Total Dynamic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Total Dynamic are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Aberdeen Total is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cohen Steers Qualityome

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Qualityome are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aberdeen Total and Cohen Steers

The main advantage of trading using opposite Aberdeen Total and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Total 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.

The idea behind Aberdeen Total Dynamic and Cohen Steers Qualityome 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.