Correlation Between FAM and Cohen Steers

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

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

Diversification Opportunities for FAM and Cohen Steers

0.0

Correlation Coefficient

FAM  Cohen Steers

Pay attention - limited upside

The 3 months correlation between FAM and Cohen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FAM 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 FAM 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 FAM 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 FAM i.e., FAM and Cohen Steers go up and down completely randomly.

Pair Corralation between FAM and Cohen Steers

If you would invest  2,064  in Cohen Steers Limited on December 2, 2024 and sell it today you would earn a total of  34.00  from holding Cohen Steers Limited or generate 1.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FAM  vs.  Cohen Steers Limited

FAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days FAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, FAM is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Cohen Steers Limited

Risk-Adjusted Performance

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 FAM and Cohen Steers

The main advantage of trading using opposite FAM and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAM 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 FAM 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.