Correlation Between RiverNorth Flexible and Cohen Steers

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

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

Diversification Opportunities for RiverNorth Flexible and Cohen Steers

0.78

Correlation Coefficient

RiverNorth Flexible  Cohen Steers

Poor diversification

The 3 months correlation between RiverNorth and Cohen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorth Flexible Municipalo and Cohen Steers Qualityome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Qualityome and RiverNorth Flexible 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 RiverNorth Flexible Municipalome 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 Qualityome has no effect on the direction of RiverNorth Flexible i.e., RiverNorth Flexible and Cohen Steers go up and down completely randomly.

Pair Corralation between RiverNorth Flexible and Cohen Steers

Given the investment horizon of 90 days RiverNorth Flexible Municipalome is expected to generate 0.51 times more return on investment than Cohen Steers. However, RiverNorth Flexible Municipalome is 1.97 times less risky than Cohen Steers. It trades about -0.03 of its potential returns per unit of risk. Cohen Steers Qualityome is currently generating about -0.06 per unit of risk. If you would invest  1,410  in RiverNorth Flexible Municipalome on October 24, 2024 and sell it today you would lose (28.00) from holding RiverNorth Flexible Municipalome or give up 1.99% of portfolio value over 90 days.

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

RiverNorth Flexible Municipalo  vs.  Cohen Steers Qualityome

RiverNorth Flexible

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RiverNorth Flexible Municipalome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, RiverNorth Flexible is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Cohen Steers Qualityome

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with RiverNorth Flexible and Cohen Steers

The main advantage of trading using opposite RiverNorth Flexible and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverNorth Flexible 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 RiverNorth Flexible Municipalome and Cohen Steers Qualityome 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.