Correlation Between Eaton Vance and Cohen Steers

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

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

Diversification Opportunities for Eaton Vance and Cohen Steers

0.41

Correlation Coefficient

Eaton Vance  Cohen Steers

Very weak diversification

The 3 months correlation between Eaton and Cohen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance New and Cohen Steers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Limited and Eaton Vance 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 Eaton Vance New 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 Limited has no effect on the direction of Eaton Vance i.e., Eaton Vance and Cohen Steers go up and down completely randomly.

Pair Corralation between Eaton Vance and Cohen Steers

Considering the 90-day investment horizon Eaton Vance New is expected to under-perform the Cohen Steers. But the stock apears to be less risky and, when comparing its historical volatility, Eaton Vance New is 1.0 times less risky than Cohen Steers. The stock trades about -0.06 of its potential returns per unit of risk. The Cohen Steers Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,074  in Cohen Steers Limited on October 22, 2024 and sell it today you would lose (34.00) from holding Cohen Steers Limited or give up 1.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

Eaton Vance New  vs.  Cohen Steers Limited

Eaton Vance New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cohen Steers Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Limited has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable fundamental indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eaton Vance and Cohen Steers

The main advantage of trading using opposite Eaton Vance and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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 Eaton Vance New and Cohen Steers Limited 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.