Correlation Between Pimco Floating and Cohen Steers

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

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

Diversification Opportunities for Pimco Floating and Cohen Steers

0.62

Correlation Coefficient

Pimco Floating  Cohen Steers

Poor diversification

The 3 months correlation between Pimco and Cohen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Floating Income and Cohen Steers Preferd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Preferd and Pimco Floating 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 Pimco Floating Income 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 Preferd has no effect on the direction of Pimco Floating i.e., Pimco Floating and Cohen Steers go up and down completely randomly.

Pair Corralation between Pimco Floating and Cohen Steers

Assuming the 90 days horizon Pimco Floating Income is expected to under-perform the Cohen Steers. In addition to that, Pimco Floating is 1.05 times more volatile than Cohen Steers Preferd. It trades about -0.42 of its total potential returns per unit of risk. Cohen Steers Preferd is currently generating about -0.31 per unit of volatility. If you would invest  1,242  in Cohen Steers Preferd on October 8, 2024 and sell it today you would lose (11.00) from holding Cohen Steers Preferd or give up 0.89% of portfolio value over 90 days.

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

Pimco Floating Income  vs.  Cohen Steers Preferd

Pimco Floating Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Floating Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cohen Steers Preferd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Preferd has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Floating and Cohen Steers

The main advantage of trading using opposite Pimco Floating and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Floating 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 Pimco Floating Income and Cohen Steers Preferd 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.