Correlation Between Emerging Markets and Cohen

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

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

Diversification Opportunities for Emerging Markets and Cohen

0.04

Correlation Coefficient

Emerging Markets  Cohen

Significant diversification

The 3 months correlation between Emerging and Cohen is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and Cohen And Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen And Steers and Emerging Markets 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 Emerging Markets Portfolio are associated (or correlated) with Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen And Steers has no effect on the direction of Emerging Markets i.e., Emerging Markets and Cohen go up and down completely randomly.

Pair Corralation between Emerging Markets and Cohen

Assuming the 90 days horizon Emerging Markets is expected to generate 3.37 times less return on investment than Cohen. In addition to that, Emerging Markets is 1.06 times more volatile than Cohen And Steers. It trades about 0.02 of its total potential returns per unit of risk. Cohen And Steers is currently generating about 0.06 per unit of volatility. If you would invest  5,122  in Cohen And Steers on September 3, 2024 and sell it today you would earn a total of  153.00  from holding Cohen And Steers or generate 2.99% return on investment over 90 days.

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

Emerging Markets Portfolio  vs.  Cohen And Steers

Emerging Markets Por

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Portfolio are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Emerging Markets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cohen And Steers

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen And Steers are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cohen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Emerging Markets and Cohen

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

The idea behind Emerging Markets Portfolio and Cohen And Steers 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.