Correlation Between Cohen Steers and First Trust
Can any of the company-specific risk be diversified away by investing in both Cohen Steers and First Trust 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 Steers and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Prfrd and First Trust Preferred, you can compare the effects of market volatilities on Cohen Steers and First Trust 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 Steers with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and First Trust.
Diversification Opportunities for Cohen Steers and First Trust
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Cohen and First is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Prfrd and First Trust Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Preferred and Cohen Steers 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 Steers Prfrd are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Preferred has no effect on the direction of Cohen Steers i.e., Cohen Steers and First Trust go up and down completely randomly.
Pair Corralation between Cohen Steers and First Trust
Assuming the 90 days horizon Cohen Steers is expected to generate 1.1 times less return on investment than First Trust. But when comparing it to its historical volatility, Cohen Steers Prfrd is 1.23 times less risky than First Trust. It trades about 0.51 of its potential returns per unit of risk. First Trust Preferred is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,917 in First Trust Preferred on April 26, 2025 and sell it today you would earn a total of 83.00 from holding First Trust Preferred or generate 4.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cohen Steers Prfrd vs. First Trust Preferred
Performance |
Timeline |
Cohen Steers Prfrd |
First Trust Preferred |
Cohen Steers and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cohen Steers and First Trust
The main advantage of trading using opposite Cohen Steers and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.Cohen Steers vs. Neiman Large Cap | Cohen Steers vs. Qs Large Cap | Cohen Steers vs. Dreyfus Large Cap | Cohen Steers vs. Fidelity Large Cap |
First Trust vs. Multisector Bond Sma | First Trust vs. Old Westbury California | First Trust vs. Bbh Intermediate Municipal | First Trust vs. Artisan High Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |