Correlation Between Barings Corporate and Cohen Steers

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

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

Diversification Opportunities for Barings Corporate and Cohen Steers

0.48

Correlation Coefficient

Barings Corporate  Cohen Steers

Very weak diversification

The 3 months correlation between Barings and Cohen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors and Cohen Steers Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Reit and Barings Corporate 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 Barings Corporate Investors 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 Reit has no effect on the direction of Barings Corporate i.e., Barings Corporate and Cohen Steers go up and down completely randomly.

Pair Corralation between Barings Corporate and Cohen Steers

Considering the 90-day investment horizon Barings Corporate Investors is expected to generate 2.46 times more return on investment than Cohen Steers. However, Barings Corporate is 2.46 times more volatile than Cohen Steers Reit. It trades about 0.08 of its potential returns per unit of risk. Cohen Steers Reit is currently generating about 0.13 per unit of risk. If you would invest  2,035  in Barings Corporate Investors on December 28, 2024 and sell it today you would earn a total of  194.00  from holding Barings Corporate Investors or generate 9.53% return on investment over 90 days.

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

Barings Corporate Investors  vs.  Cohen Steers Reit

Barings Corporate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Corporate Investors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Barings Corporate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cohen Steers Reit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Reit are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively fragile basic indicators, Cohen Steers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Barings Corporate and Cohen Steers

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