Correlation Between Visa and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Cohen Steers Infrastructure, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Cohen Steers.
Diversification Opportunities for Visa and Cohen Steers
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Cohen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Cohen Steers go up and down completely randomly.
Pair Corralation between Visa and Cohen Steers
Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Cohen Steers. But the stock apears to be less risky and, when comparing its historical volatility, Visa Class A is 1.09 times less risky than Cohen Steers. The stock trades about -0.38 of its potential returns per unit of risk. The Cohen Steers Infrastructure is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 2,261 in Cohen Steers Infrastructure on January 20, 2024 and sell it today you would lose (99.00) from holding Cohen Steers Infrastructure or give up 4.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Cohen Steers Infrastructure
Performance |
| Timeline |
| Visa Class A |
| Cohen Steers Infrast |
Visa and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Cohen Steers
The main advantage of trading using opposite Visa and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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