Correlation Between Rational Strategic and Cohen Steers

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

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

Diversification Opportunities for Rational Strategic and Cohen Steers

-0.32

Correlation Coefficient

Rational Strategic  Cohen Steers

Very good diversification

The 3 months correlation between Rational and Cohen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rational Strategic Allocation and Cohen Steers Prefrd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Prefrd and Rational Strategic 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 Rational Strategic Allocation 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 Prefrd has no effect on the direction of Rational Strategic i.e., Rational Strategic and Cohen Steers go up and down completely randomly.

Pair Corralation between Rational Strategic and Cohen Steers

Assuming the 90 days horizon Rational Strategic Allocation is expected to under-perform the Cohen Steers. In addition to that, Rational Strategic is 10.93 times more volatile than Cohen Steers Prefrd. It trades about -0.09 of its total potential returns per unit of risk. Cohen Steers Prefrd is currently generating about 0.09 per unit of volatility. If you would invest  1,208  in Cohen Steers Prefrd on December 29, 2024 and sell it today you would earn a total of  11.00  from holding Cohen Steers Prefrd or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Rational Strategic Allocation  vs.  Cohen Steers Prefrd

Rational Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rational Strategic Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Cohen Steers Prefrd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Prefrd are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Rational Strategic and Cohen Steers

The main advantage of trading using opposite Rational Strategic and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Strategic 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 Rational Strategic Allocation and Cohen Steers Prefrd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.