Correlation Between Cohen Steers and Guggenheim Taxable

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

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

Diversification Opportunities for Cohen Steers and Guggenheim Taxable

0.54

Correlation Coefficient

Cohen Steers  Guggenheim Taxable

Very weak diversification

The 3 months correlation between Cohen and Guggenheim is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Real and Guggenheim Taxable Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Taxable and Cohen Steers 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 Steers Real are associated (or correlated) with Guggenheim Taxable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Taxable has no effect on the direction of Cohen Steers i.e., Cohen Steers and Guggenheim Taxable go up and down completely randomly.

Pair Corralation between Cohen Steers and Guggenheim Taxable

Given the investment horizon of 90 days Cohen Steers Real is expected to generate 1.55 times more return on investment than Guggenheim Taxable. However, Cohen Steers is 1.55 times more volatile than Guggenheim Taxable Municipal. It trades about -0.01 of its potential returns per unit of risk. Guggenheim Taxable Municipal is currently generating about -0.17 per unit of risk. If you would invest  1,635  in Cohen Steers Real on September 3, 2024 and sell it today you would lose (24.00) from holding Cohen Steers Real or give up 1.47% of portfolio value over 90 days.

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

Cohen Steers Real  vs.  Guggenheim Taxable Municipal

Cohen Steers Real

Risk-Adjusted Performance

0 of 100

Weak

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

Guggenheim Taxable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Taxable Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Cohen Steers and Guggenheim Taxable

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

The idea behind Cohen Steers Real and Guggenheim Taxable Municipal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.