Correlation Between Pimco Commoditiesplus and Cohen Steers

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

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

Diversification Opportunities for Pimco Commoditiesplus and Cohen Steers

-0.16

Correlation Coefficient

Pimco Commoditiesplus  Cohen Steers

Good diversification

The 3 months correlation between Pimco and Cohen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Moditiesplus Strategy and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Pimco Commoditiesplus 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 Pimco Moditiesplus Strategy 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 Real has no effect on the direction of Pimco Commoditiesplus i.e., Pimco Commoditiesplus and Cohen Steers go up and down completely randomly.

Pair Corralation between Pimco Commoditiesplus and Cohen Steers

Assuming the 90 days horizon Pimco Moditiesplus Strategy is expected to generate 1.21 times more return on investment than Cohen Steers. However, Pimco Commoditiesplus is 1.21 times more volatile than Cohen Steers Real. It trades about 0.07 of its potential returns per unit of risk. Cohen Steers Real is currently generating about 0.02 per unit of risk. If you would invest  628.00  in Pimco Moditiesplus Strategy on September 5, 2024 and sell it today you would earn a total of  28.00  from holding Pimco Moditiesplus Strategy or generate 4.46% return on investment over 90 days.

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

Pimco Moditiesplus Strategy  vs.  Cohen Steers Real

Pimco Commoditiesplus

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Moditiesplus Strategy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Commoditiesplus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cohen Steers Real

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Real are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Pimco Commoditiesplus and Cohen Steers

The main advantage of trading using opposite Pimco Commoditiesplus and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Commoditiesplus 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 Pimco Moditiesplus Strategy and Cohen Steers Real 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.