Correlation Between Pimco New and Cohen Steers

Can any of the company-specific risk be diversified away by investing in both Pimco New 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 New 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 New York and Cohen Steers Limited, you can compare the effects of market volatilities on Pimco New 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 New with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco New and Cohen Steers.

Diversification Opportunities for Pimco New and Cohen Steers

0.85

Correlation Coefficient

Pimco New  Cohen Steers

Very poor diversification

The 3 months correlation between Pimco and Cohen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York and Cohen Steers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Limited and Pimco New 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 New York 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 Limited has no effect on the direction of Pimco New i.e., Pimco New and Cohen Steers go up and down completely randomly.

Pair Corralation between Pimco New and Cohen Steers

Considering the 90-day investment horizon Pimco New York is expected to under-perform the Cohen Steers. But the fund apears to be less risky and, when comparing its historical volatility, Pimco New York is 1.16 times less risky than Cohen Steers. The fund trades about -0.23 of its potential returns per unit of risk. The Cohen Steers Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,074  in Cohen Steers Limited on October 22, 2024 and sell it today you would lose (34.00) from holding Cohen Steers Limited or give up 1.64% of portfolio value over 90 days.

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

Pimco New York  vs.  Cohen Steers Limited

Pimco New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite latest abnormal performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Cohen Steers Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Limited has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable fundamental indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pimco New and Cohen Steers

The main advantage of trading using opposite Pimco New and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New 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 New York and Cohen Steers Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.