Correlation Between Cohen Steers and Realty Income
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Realty Income 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 Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Real and Realty Income, you can compare the effects of market volatilities on Cohen Steers and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Realty Income.
Diversification Opportunities for Cohen Steers and Realty Income
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cohen and Realty is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Real and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Real are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Cohen Steers i.e., Cohen Steers and Realty Income go up and down completely randomly.
Pair Corralation between Cohen Steers and Realty Income
Assuming the 90 days horizon Cohen Steers is expected to generate 2.08 times less return on investment than Realty Income. But when comparing it to its historical volatility, Cohen Steers Real is 1.12 times less risky than Realty Income. It trades about 0.07 of its potential returns per unit of risk. Realty Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,205 in Realty Income on December 18, 2024 and sell it today you would earn a total of 493.00 from holding Realty Income or generate 9.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cohen Steers Real vs. Realty Income
Performance |
Timeline |
Cohen Steers Real |
Realty Income |
Cohen Steers and Realty Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cohen Steers and Realty Income
The main advantage of trading using opposite Cohen Steers and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.Cohen Steers vs. Transamerica Emerging Markets | Cohen Steers vs. Rbc Emerging Markets | Cohen Steers vs. Aqr Long Short Equity | Cohen Steers vs. Doubleline Emerging Markets |
Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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