Correlation Between Cohen and Target
Can any of the company-specific risk be diversified away by investing in both Cohen and Target 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 Target 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 Target, you can compare the effects of market volatilities on Cohen and Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen and Target.
Diversification Opportunities for Cohen and Target
Very poor diversification
The 3 months correlation between Cohen and Target is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cohen And Steers and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Cohen i.e., Cohen and Target go up and down completely randomly.
Pair Corralation between Cohen and Target
Considering the 90-day investment horizon Cohen is expected to generate 1.77 times less return on investment than Target. But when comparing it to its historical volatility, Cohen And Steers is 2.83 times less risky than Target. It trades about 0.42 of its potential returns per unit of risk. Target is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 15,144 in Target on December 30, 2023 and sell it today you would earn a total of 2,577 from holding Target or generate 17.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cohen And Steers vs. Target
Performance |
Timeline |
Cohen And Steers |
Target |
Cohen and Target Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cohen and Target
The main advantage of trading using opposite Cohen and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.Cohen vs. Morgan Stanley India | Cohen vs. Blackrock Enhanced Capital | Cohen vs. India Closed | Cohen vs. Cornerstone Strategic Value |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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