Correlation Between Cohen and Gabelli Healthcare

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

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

Diversification Opportunities for Cohen and Gabelli Healthcare

0.78

Correlation Coefficient

Cohen  Gabelli Healthcare

Poor diversification

The 3 months correlation between Cohen and Gabelli is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cohen And Steers and The Gabelli Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Gabelli Healthcare and Cohen 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 And Steers are associated (or correlated) with Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Gabelli Healthcare has no effect on the direction of Cohen i.e., Cohen and Gabelli Healthcare go up and down completely randomly.

Pair Corralation between Cohen and Gabelli Healthcare

Considering the 90-day investment horizon Cohen And Steers is expected to generate 0.9 times more return on investment than Gabelli Healthcare. However, Cohen And Steers is 1.11 times less risky than Gabelli Healthcare. It trades about -0.09 of its potential returns per unit of risk. The Gabelli Healthcare is currently generating about -0.09 per unit of risk. If you would invest  2,572  in Cohen And Steers on November 28, 2024 and sell it today you would lose (119.00) from holding Cohen And Steers or give up 4.63% of portfolio value over 90 days.

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

Cohen And Steers  vs.  The Gabelli Healthcare

Cohen And Steers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cohen And Steers has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Cohen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

The Gabelli Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gabelli Healthcare 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 and Gabelli Healthcare

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

The idea behind Cohen And Steers and The Gabelli Healthcare 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.