Correlation Between Cohen Steers and Nuveen NASDAQ

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

By analyzing existing cross correlation between Cohen Steers Qualityome and Nuveen NASDAQ 100, you can compare the effects of market volatilities on Cohen Steers and Nuveen NASDAQ 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 Nuveen NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Nuveen NASDAQ.

Diversification Opportunities for Cohen Steers and Nuveen NASDAQ

-0.43

Correlation Coefficient

Cohen Steers  Nuveen NASDAQ

Very good diversification

The 3 months correlation between Cohen and Nuveen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Qualityome and Nuveen NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen NASDAQ 100 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 Qualityome are associated (or correlated) with Nuveen NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen NASDAQ 100 has no effect on the direction of Cohen Steers i.e., Cohen Steers and Nuveen NASDAQ go up and down completely randomly.

Pair Corralation between Cohen Steers and Nuveen NASDAQ

Considering the 90-day investment horizon Cohen Steers Qualityome is expected to generate 1.37 times more return on investment than Nuveen NASDAQ. However, Cohen Steers is 1.37 times more volatile than Nuveen NASDAQ 100. It trades about 0.05 of its potential returns per unit of risk. Nuveen NASDAQ 100 is currently generating about 0.06 per unit of risk. If you would invest  1,011  in Cohen Steers Qualityome on November 27, 2024 and sell it today you would earn a total of  291.00  from holding Cohen Steers Qualityome or generate 28.78% return on investment over 90 days.

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

Cohen Steers Qualityome  vs.  Nuveen NASDAQ 100

Cohen Steers Qualityome

Risk-Adjusted Performance

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.

Nuveen NASDAQ 100

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen NASDAQ 100 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Nuveen NASDAQ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cohen Steers and Nuveen NASDAQ

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

The idea behind Cohen Steers Qualityome and Nuveen NASDAQ 100 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.