Correlation Between Ford and Cohen Steers

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

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

Diversification Opportunities for Ford and Cohen Steers

-0.23

Correlation Coefficient

Ford  Cohen Steers

Very good diversification

The 3 months correlation between Ford and Cohen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cohen Steers Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Mlp and Ford 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 Ford Motor 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 Mlp has no effect on the direction of Ford i.e., Ford and Cohen Steers go up and down completely randomly.

Pair Corralation between Ford and Cohen Steers

Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.81 times more return on investment than Cohen Steers. However, Ford is 1.81 times more volatile than Cohen Steers Mlp. It trades about -0.04 of its potential returns per unit of risk. Cohen Steers Mlp is currently generating about -0.2 per unit of risk. If you would invest  958.00  in Ford Motor on December 4, 2024 and sell it today you would lose (19.00) from holding Ford Motor or give up 1.98% of portfolio value over 90 days.

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

Ford Motor  vs.  Cohen Steers Mlp

Ford Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cohen Steers Mlp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cohen Steers Mlp has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ford and Cohen Steers

The main advantage of trading using opposite Ford and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor and Cohen Steers Mlp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.