Correlation Between Cohen Steers and Guggenheim Active

Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Guggenheim Active 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 Active 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 Active Allocation, you can compare the effects of market volatilities on Cohen Steers and Guggenheim Active 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 Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Guggenheim Active.

Diversification Opportunities for Cohen Steers and Guggenheim Active

0.77

Correlation Coefficient

Cohen Steers  Guggenheim Active

Poor diversification

The 3 months correlation between Cohen and Guggenheim is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Real and Guggenheim Active Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Active 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 Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Active has no effect on the direction of Cohen Steers i.e., Cohen Steers and Guggenheim Active go up and down completely randomly.

Pair Corralation between Cohen Steers and Guggenheim Active

Given the investment horizon of 90 days Cohen Steers is expected to generate 1.24 times less return on investment than Guggenheim Active. In addition to that, Cohen Steers is 1.65 times more volatile than Guggenheim Active Allocation. It trades about 0.02 of its total potential returns per unit of risk. Guggenheim Active Allocation is currently generating about 0.04 per unit of volatility. If you would invest  1,539  in Guggenheim Active Allocation on December 1, 2024 and sell it today you would earn a total of  22.00  from holding Guggenheim Active Allocation or generate 1.43% return on investment over 90 days.

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

Cohen Steers Real  vs.  Guggenheim Active Allocation

Cohen Steers Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Real are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Active

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Cohen Steers and Guggenheim Active

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

The idea behind Cohen Steers Real and Guggenheim Active Allocation 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.