Correlation Between Global X and Cohen

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

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

Diversification Opportunities for Global X and Cohen

0.67

Correlation Coefficient

Global X  Cohen

Poor diversification

The 3 months correlation between Global and Cohen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global X Social 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 Global X 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 Global X Social 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 Global X i.e., Global X and Cohen go up and down completely randomly.

Pair Corralation between Global X and Cohen

Given the investment horizon of 90 days Global X Social is expected to generate 3.07 times more return on investment than Cohen. However, Global X is 3.07 times more volatile than Cohen and Steers. It trades about 0.12 of its potential returns per unit of risk. Cohen and Steers is currently generating about 0.04 per unit of risk. If you would invest  3,852  in Global X Social on September 1, 2024 and sell it today you would earn a total of  480.00  from holding Global X Social or generate 12.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Global X Social  vs.  Cohen and Steers

Global X Social

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Social are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Cohen and Steers

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen and Steers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Cohen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Global X and Cohen

The main advantage of trading using opposite Global X and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Social 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.