Correlation Between Cohen Steers and RiverNorth Flexible

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

Diversification Opportunities for Cohen Steers and RiverNorth Flexible

0.71

Correlation Coefficient

Cohen Steers  RiverNorth Flexible

Poor diversification

The 3 months correlation between Cohen and RiverNorth is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Qualityome and RiverNorth Flexible Municipalo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Flexible 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 RiverNorth Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Flexible has no effect on the direction of Cohen Steers i.e., Cohen Steers and RiverNorth Flexible go up and down completely randomly.

Pair Corralation between Cohen Steers and RiverNorth Flexible

Considering the 90-day investment horizon Cohen Steers Qualityome is expected to under-perform the RiverNorth Flexible. In addition to that, Cohen Steers is 1.87 times more volatile than RiverNorth Flexible Municipalome. It trades about -0.11 of its total potential returns per unit of risk. RiverNorth Flexible Municipalome is currently generating about -0.1 per unit of volatility. If you would invest  1,432  in RiverNorth Flexible Municipalome on October 9, 2024 and sell it today you would lose (63.00) from holding RiverNorth Flexible Municipalome or give up 4.4% of portfolio value over 90 days.

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

Cohen Steers Qualityome  vs.  RiverNorth Flexible Municipalo

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 latest fragile performance, the Fund's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the fund traders.

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.

Pair Trading with Cohen Steers and RiverNorth Flexible

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

The idea behind Cohen Steers Qualityome and RiverNorth Flexible Municipalome 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.