Correlation Between Cohen Steers and Nuveen Arizona

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

By analyzing existing cross correlation between Cohen Steers Closed and Nuveen Arizona Quality, you can compare the effects of market volatilities on Cohen Steers and Nuveen Arizona 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 Nuveen Arizona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Nuveen Arizona.

Diversification Opportunities for Cohen Steers and Nuveen Arizona

0.06

Correlation Coefficient

Cohen Steers  Nuveen Arizona

Significant diversification

The 3 months correlation between Cohen and Nuveen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Closed and Nuveen Arizona Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Arizona Quality 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 Closed are associated (or correlated) with Nuveen Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Arizona Quality has no effect on the direction of Cohen Steers i.e., Cohen Steers and Nuveen Arizona go up and down completely randomly.

Pair Corralation between Cohen Steers and Nuveen Arizona

Considering the 90-day investment horizon Cohen Steers Closed is expected to under-perform the Nuveen Arizona. But the fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Closed is 3.64 times less risky than Nuveen Arizona. The fund trades about -0.11 of its potential returns per unit of risk. The Nuveen Arizona Quality is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,234  in Nuveen Arizona Quality on December 4, 2024 and sell it today you would earn a total of  110.00  from holding Nuveen Arizona Quality or generate 8.91% return on investment over 90 days.

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

Cohen Steers Closed  vs.  Nuveen Arizona Quality

Cohen Steers Closed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cohen Steers Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen Arizona Quality

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Arizona Quality are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Nuveen Arizona may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cohen Steers and Nuveen Arizona

The main advantage of trading using opposite Cohen Steers and Nuveen Arizona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Nuveen Arizona 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 Nuveen Arizona will offset losses from the drop in Nuveen Arizona's long position.

The idea behind Cohen Steers Closed and Nuveen Arizona Quality 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.