Correlation Between Thornburg Income and Cohen Steers

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

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

Diversification Opportunities for Thornburg Income and Cohen Steers

0.54

Correlation Coefficient

Thornburg Income  Cohen Steers

Very weak diversification

The 3 months correlation between Thornburg and Cohen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Income Builder and Cohen Steers Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Total and Thornburg Income 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 Thornburg Income Builder 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 Total has no effect on the direction of Thornburg Income i.e., Thornburg Income and Cohen Steers go up and down completely randomly.

Pair Corralation between Thornburg Income and Cohen Steers

Given the investment horizon of 90 days Thornburg Income Builder is expected to generate 0.75 times more return on investment than Cohen Steers. However, Thornburg Income Builder is 1.33 times less risky than Cohen Steers. It trades about 0.12 of its potential returns per unit of risk. Cohen Steers Total is currently generating about -0.09 per unit of risk. If you would invest  1,678  in Thornburg Income Builder on November 28, 2024 and sell it today you would earn a total of  75.50  from holding Thornburg Income Builder or generate 4.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Thornburg Income Builder  vs.  Cohen Steers Total

Thornburg Income Builder

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg Income Builder are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Thornburg Income is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cohen Steers Total

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cohen Steers Total has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong technical and fundamental indicators, Cohen Steers is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Thornburg Income and Cohen Steers

The main advantage of trading using opposite Thornburg Income and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Income 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 Thornburg Income Builder and Cohen Steers Total 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.