Correlation Between Cohen Steers and Virtus Global

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

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

Diversification Opportunities for Cohen Steers and Virtus Global

0.55

Correlation Coefficient

Cohen Steers  Virtus Global

Very weak diversification

The 3 months correlation between Cohen and Virtus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Global and Virtus Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Infras and Cohen Steers 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 Cohen Steers Global are associated (or correlated) with Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Infras has no effect on the direction of Cohen Steers i.e., Cohen Steers and Virtus Global go up and down completely randomly.

Pair Corralation between Cohen Steers and Virtus Global

Assuming the 90 days horizon Cohen Steers Global is expected to under-perform the Virtus Global. In addition to that, Cohen Steers is 1.25 times more volatile than Virtus Global Infrastructure. It trades about -0.08 of its total potential returns per unit of risk. Virtus Global Infrastructure is currently generating about 0.03 per unit of volatility. If you would invest  1,508  in Virtus Global Infrastructure on September 8, 2024 and sell it today you would earn a total of  18.00  from holding Virtus Global Infrastructure or generate 1.19% return on investment over 90 days.

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

Cohen Steers Global  vs.  Virtus Global Infrastructure

Cohen Steers Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Global Infras

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Infrastructure are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Virtus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cohen Steers and Virtus Global

The main advantage of trading using opposite Cohen Steers and Virtus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Virtus Global 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 Virtus Global will offset losses from the drop in Virtus Global's long position.

The idea behind Cohen Steers Global and Virtus Global Infrastructure 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.