Correlation Between Eaton Vance and Cohen Steers

Can any of the company-specific risk be diversified away by investing in both Eaton Vance 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 Eaton Vance and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eaton Vance Tax and Cohen Steers Limited, you can compare the effects of market volatilities on Eaton Vance 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 Eaton Vance with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Cohen Steers.

Diversification Opportunities for Eaton Vance and Cohen Steers

0.87

Correlation Coefficient

Eaton Vance  Cohen Steers

Very poor diversification

The 3 months correlation between Eaton and Cohen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Tax and Cohen Steers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Limited and Eaton Vance 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 Eaton Vance Tax 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 Limited has no effect on the direction of Eaton Vance i.e., Eaton Vance and Cohen Steers go up and down completely randomly.

Pair Corralation between Eaton Vance and Cohen Steers

Considering the 90-day investment horizon Eaton Vance Tax is expected to generate 1.32 times more return on investment than Cohen Steers. However, Eaton Vance is 1.32 times more volatile than Cohen Steers Limited. It trades about -0.06 of its potential returns per unit of risk. Cohen Steers Limited is currently generating about -0.25 per unit of risk. If you would invest  2,453  in Eaton Vance Tax on February 1, 2024 and sell it today you would lose (34.00) from holding Eaton Vance Tax or give up 1.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Eaton Vance Tax  vs.  Cohen Steers Limited

Eaton Vance Tax

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cohen Steers Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Limited are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable fundamental indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eaton Vance and Cohen Steers

The main advantage of trading using opposite Eaton Vance and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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 Eaton Vance Tax and Cohen Steers Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.