Correlation Between GM and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Cohen Steers Infrastructure, you can compare the effects of market volatilities on GM 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 GM with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Cohen Steers.
Diversification Opportunities for GM and Cohen Steers
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Cohen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Cohen Steers Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Infrast and GM 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 General Motors 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 Infrast has no effect on the direction of GM i.e., GM and Cohen Steers go up and down completely randomly.
Pair Corralation between GM and Cohen Steers
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.62 times more return on investment than Cohen Steers. However, GM is 1.62 times more volatile than Cohen Steers Infrastructure. It trades about 0.12 of its potential returns per unit of risk. Cohen Steers Infrastructure is currently generating about -0.07 per unit of risk. If you would invest 4,355 in General Motors on January 25, 2024 and sell it today you would earn a total of 166.00 from holding General Motors or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Cohen Steers Infrastructure
Performance |
| Timeline |
| General Motors |
| Cohen Steers Infrast |
GM and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Cohen Steers
The main advantage of trading using opposite GM and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors and Cohen Steers Infrastructure 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.| Cohen Steers vs. Prudential Core Conservative | Cohen Steers vs. Calvert Conservative Allocation | Cohen Steers vs. Western Asset Diversified | Cohen Steers vs. Jpmorgan Diversified Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |