Correlation Between Pace Smallmedium and Cohen Steers

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

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

Diversification Opportunities for Pace Smallmedium and Cohen Steers

-0.82

Correlation Coefficient

Pace Smallmedium  Cohen Steers

Pay attention - limited upside

The 3 months correlation between Pace and Cohen is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Growth and Cohen Steers Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Intl and Pace Smallmedium 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 Pace Smallmedium Growth 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 Intl has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Cohen Steers go up and down completely randomly.

Pair Corralation between Pace Smallmedium and Cohen Steers

Assuming the 90 days horizon Pace Smallmedium Growth is expected to generate 1.38 times more return on investment than Cohen Steers. However, Pace Smallmedium is 1.38 times more volatile than Cohen Steers Intl. It trades about 0.18 of its potential returns per unit of risk. Cohen Steers Intl is currently generating about -0.29 per unit of risk. If you would invest  1,245  in Pace Smallmedium Growth on September 13, 2024 and sell it today you would earn a total of  167.00  from holding Pace Smallmedium Growth or generate 13.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Pace Smallmedium Growth  vs.  Cohen Steers Intl

Pace Smallmedium Growth

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pace Smallmedium Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pace Smallmedium showed solid returns over the last few months and may actually be approaching a breakup point.

Cohen Steers Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Intl has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Pace Smallmedium and Cohen Steers

The main advantage of trading using opposite Pace Smallmedium and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium 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 Pace Smallmedium Growth and Cohen Steers Intl 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.