Correlation Between Shopify and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Shopify 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 Shopify and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shopify and Cohen Steers Infrastructure, you can compare the effects of market volatilities on Shopify 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 Shopify with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shopify and Cohen Steers.
Diversification Opportunities for Shopify and Cohen Steers
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shopify and Cohen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shopify 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 Shopify 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 Shopify 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 Shopify i.e., Shopify and Cohen Steers go up and down completely randomly.
Pair Corralation between Shopify and Cohen Steers
Assuming the 90 days trading horizon Shopify is expected to generate 3.61 times more return on investment than Cohen Steers. However, Shopify is 3.61 times more volatile than Cohen Steers Infrastructure. It trades about 0.04 of its potential returns per unit of risk. Cohen Steers Infrastructure is currently generating about -0.03 per unit of risk. If you would invest 6,183 in Shopify on January 24, 2024 and sell it today you would earn a total of 3,927 from holding Shopify or generate 63.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shopify vs. Cohen Steers Infrastructure
Performance |
| Timeline |
| Shopify |
| Cohen Steers Infrast |
Shopify and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shopify and Cohen Steers
The main advantage of trading using opposite Shopify and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shopify 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.| Shopify vs. Plurilock Security | Shopify vs. Kwesst Micro Systems | Shopify vs. Perimeter Medical Imaging | Shopify vs. Jericho Oil Corp |
| Cohen Steers vs. Vanguard Total Stock | Cohen Steers vs. Vanguard 500 Index | Cohen Steers vs. Vanguard Total Stock | Cohen Steers vs. Vanguard Total Stock |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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