Correlation Between Frontier Mfg and Cohen Steers

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

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

Diversification Opportunities for Frontier Mfg and Cohen Steers

0.92

Correlation Coefficient

Frontier Mfg  Cohen Steers

Almost no diversification

The 3 months correlation between Frontier and Cohen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Mfg E and Cohen Steers Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Global and Frontier Mfg 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 Frontier Mfg E 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 Global has no effect on the direction of Frontier Mfg i.e., Frontier Mfg and Cohen Steers go up and down completely randomly.

Pair Corralation between Frontier Mfg and Cohen Steers

Assuming the 90 days horizon Frontier Mfg is expected to generate 1.12 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Frontier Mfg E is 1.1 times less risky than Cohen Steers. It trades about 0.16 of its potential returns per unit of risk. Cohen Steers Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,287  in Cohen Steers Global on October 24, 2024 and sell it today you would earn a total of  54.00  from holding Cohen Steers Global or generate 2.36% return on investment over 90 days.

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

Frontier Mfg E  vs.  Cohen Steers Global

Frontier Mfg E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontier Mfg E has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

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 latest weak performance, the Fund's basic 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 Frontier Mfg and Cohen Steers

The main advantage of trading using opposite Frontier Mfg and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Mfg 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 Frontier Mfg E and Cohen Steers Global 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.