Correlation Between Adams Natural and Cohen Steers

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

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

Diversification Opportunities for Adams Natural and Cohen Steers

-0.32

Correlation Coefficient

Adams Natural  Cohen Steers

Very good diversification

The 3 months correlation between Adams and Cohen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources 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 Adams Natural 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 Adams Natural Resources 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 Adams Natural i.e., Adams Natural and Cohen Steers go up and down completely randomly.

Pair Corralation between Adams Natural and Cohen Steers

Considering the 90-day investment horizon Adams Natural Resources is expected to generate 0.72 times more return on investment than Cohen Steers. However, Adams Natural Resources is 1.39 times less risky than Cohen Steers. It trades about 0.15 of its potential returns per unit of risk. Cohen Steers Qualityome is currently generating about 0.05 per unit of risk. If you would invest  2,176  in Adams Natural Resources on August 31, 2024 and sell it today you would earn a total of  183.00  from holding Adams Natural Resources or generate 8.41% return on investment over 90 days.

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

Adams Natural Resources  vs.  Cohen Steers Qualityome

Adams Natural Resources

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adams Natural Resources are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very fragile technical and fundamental indicators, Adams Natural may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 Adams Natural and Cohen Steers

The main advantage of trading using opposite Adams Natural and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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 Adams Natural Resources 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.