Correlation Between VMware and Cohen Steers

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

Diversification Opportunities for VMware and Cohen Steers

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between VMware and Cohen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding VMware Inc 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 VMware 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 VMware Inc 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 VMware i.e., VMware and Cohen Steers go up and down completely randomly.

Pair Corralation between VMware and Cohen Steers

If you would invest  2,195  in Cohen Steers Infrastructure on December 29, 2023 and sell it today you would earn a total of  49.00  from holding Cohen Steers Infrastructure or generate 2.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.35%
ValuesDaily Returns

VMware Inc  vs.  Cohen Steers Infrastructure

 Performance 
       Timeline  
VMware Inc 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days VMware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, VMware is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
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.

VMware and Cohen Steers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VMware and Cohen Steers

The main advantage of trading using opposite VMware and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VMware 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 VMware Inc 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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