Correlation Between Great Elm and Cohen Steers

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

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

Diversification Opportunities for Great Elm and Cohen Steers

-0.87

Correlation Coefficient

Great Elm  Cohen Steers

Pay attention - limited upside

The 3 months correlation between Great and Cohen is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital and Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers and Great Elm 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 Great Elm Capital 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 has no effect on the direction of Great Elm i.e., Great Elm and Cohen Steers go up and down completely randomly.

Pair Corralation between Great Elm and Cohen Steers

Assuming the 90 days horizon Great Elm Capital is expected to generate 0.38 times more return on investment than Cohen Steers. However, Great Elm Capital is 2.65 times less risky than Cohen Steers. It trades about 0.1 of its potential returns per unit of risk. Cohen Steers is currently generating about -0.14 per unit of risk. If you would invest  2,471  in Great Elm Capital on November 19, 2024 and sell it today you would earn a total of  28.00  from holding Great Elm Capital or generate 1.13% return on investment over 90 days.

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

Great Elm Capital  vs.  Cohen Steers

Great Elm Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Great Elm Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Great Elm is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cohen Steers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cohen Steers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Great Elm and Cohen Steers

The main advantage of trading using opposite Great Elm and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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 Great Elm Capital and Cohen Steers 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.