Correlation Between Guggenheim Taxable and Cohen Steers

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

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

Diversification Opportunities for Guggenheim Taxable and Cohen Steers

0.3

Correlation Coefficient

Guggenheim Taxable  Cohen Steers

Weak diversification

The 3 months correlation between Guggenheim and Cohen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Taxable Municipal and Cohen Steers Tax Advantaged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Tax and Guggenheim Taxable 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 Guggenheim Taxable Municipal 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 Tax has no effect on the direction of Guggenheim Taxable i.e., Guggenheim Taxable and Cohen Steers go up and down completely randomly.

Pair Corralation between Guggenheim Taxable and Cohen Steers

Given the investment horizon of 90 days Guggenheim Taxable Municipal is expected to under-perform the Cohen Steers. In addition to that, Guggenheim Taxable is 1.2 times more volatile than Cohen Steers Tax Advantaged. It trades about -0.22 of its total potential returns per unit of risk. Cohen Steers Tax Advantaged is currently generating about -0.01 per unit of volatility. If you would invest  1,996  in Cohen Steers Tax Advantaged on September 13, 2024 and sell it today you would lose (9.00) from holding Cohen Steers Tax Advantaged or give up 0.45% of portfolio value over 90 days.

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

Guggenheim Taxable Municipal  vs.  Cohen Steers Tax Advantaged

Guggenheim Taxable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Taxable Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Cohen Steers Tax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Tax Advantaged has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guggenheim Taxable and Cohen Steers

The main advantage of trading using opposite Guggenheim Taxable and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Taxable 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 Guggenheim Taxable Municipal and Cohen Steers Tax Advantaged 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.