Correlation Between Real Estate and Cohen

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

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

Diversification Opportunities for Real Estate and Cohen

-0.57

Correlation Coefficient

Real Estate  Cohen

Excellent diversification

The 3 months correlation between Real and Cohen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Series 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 Real Estate 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 Real Estate Series 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 Real Estate i.e., Real Estate and Cohen go up and down completely randomly.

Pair Corralation between Real Estate and Cohen

Assuming the 90 days horizon Real Estate Series is expected to generate 0.57 times more return on investment than Cohen. However, Real Estate Series is 1.75 times less risky than Cohen. It trades about -0.1 of its potential returns per unit of risk. Cohen And Steers is currently generating about -0.08 per unit of risk. If you would invest  1,316  in Real Estate Series on September 12, 2024 and sell it today you would lose (15.00) from holding Real Estate Series or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.51%
Values	Daily Returns

Real Estate Series  vs.  Cohen And Steers

Real Estate Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Real Estate 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

0 of 100

Very Weak

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

The main advantage of trading using opposite Real Estate and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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 Real Estate Series 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.