Correlation Between Cohen and Sprott Focus

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

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

Diversification Opportunities for Cohen and Sprott Focus

0.0

Correlation Coefficient

Cohen  Sprott Focus

Pay attention - limited upside

The 3 months correlation between Cohen and Sprott is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cohen and Steers and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust and Cohen 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 Cohen and Steers are associated (or correlated) with Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Cohen i.e., Cohen and Sprott Focus go up and down completely randomly.

Pair Corralation between Cohen and Sprott Focus

Considering the 90-day investment horizon Cohen and Steers is expected to generate 0.83 times more return on investment than Sprott Focus. However, Cohen and Steers is 1.2 times less risky than Sprott Focus. It trades about 0.05 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.03 per unit of risk. If you would invest  1,689  in Cohen and Steers on September 3, 2024 and sell it today you would earn a total of  349.00  from holding Cohen and Steers or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cohen and Steers  vs.  Sprott Focus Trust

Cohen and Steers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen and Steers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Cohen is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Sprott Focus Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Sprott Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cohen and Sprott Focus

The main advantage of trading using opposite Cohen and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen position performs unexpectedly, Sprott Focus 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 Sprott Focus will offset losses from the drop in Sprott Focus' long position.

The idea behind Cohen and Steers and Sprott Focus Trust 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.