Correlation Between Europacific Growth and Cohen Steers

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Can any of the company-specific risk be diversified away by investing in both Europacific Growth 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 Europacific Growth and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Cohen Steers Infrastructure, you can compare the effects of market volatilities on Europacific Growth 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 Europacific Growth with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Cohen Steers.

Diversification Opportunities for Europacific Growth and Cohen Steers

0.02
  Correlation Coefficient

Significant diversification

The 3 months correlation between Europacific and Cohen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding EUROPACIFIC GROWTH FUND 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 Europacific Growth 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 Europacific Growth Fund 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 Europacific Growth i.e., Europacific Growth and Cohen Steers go up and down completely randomly.

Pair Corralation between Europacific Growth and Cohen Steers

Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.79 times more return on investment than Cohen Steers. However, Europacific Growth Fund is 1.27 times less risky than Cohen Steers. It trades about 0.25 of its potential returns per unit of risk. Cohen Steers Infrastructure is currently generating about 0.13 per unit of risk. If you would invest  5,535  in Europacific Growth Fund on December 29, 2023 and sell it today you would earn a total of  182.00  from holding Europacific Growth Fund or generate 3.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

EUROPACIFIC GROWTH FUND  vs.  Cohen Steers Infrastructure

 Performance 
       Timeline  
Europacific Growth Fund 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Europacific Growth Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Europacific Growth may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Cohen Steers Infrast 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Cohen Steers Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Europacific Growth and Cohen Steers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Europacific Growth and Cohen Steers

The main advantage of trading using opposite Europacific Growth and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth 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 Europacific Growth Fund 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.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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