Correlation Between Cohen Steers and Royce Special

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

By analyzing existing cross correlation between Cohen Steers Realty and Royce Special Equity, you can compare the effects of market volatilities on Cohen Steers and Royce Special 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 Royce Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Royce Special.

Diversification Opportunities for Cohen Steers and Royce Special

0.42

Correlation Coefficient

Cohen Steers  Royce Special

Very weak diversification

The 3 months correlation between Cohen and Royce is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Realty and Royce Special Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royce Special Equity 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 Realty are associated (or correlated) with Royce Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royce Special Equity has no effect on the direction of Cohen Steers i.e., Cohen Steers and Royce Special go up and down completely randomly.

Pair Corralation between Cohen Steers and Royce Special

Assuming the 90 days horizon Cohen Steers Realty is expected to under-perform the Royce Special. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Realty is 1.37 times less risky than Royce Special. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Royce Special Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,411  in Royce Special Equity on May 18, 2025 and sell it today you would earn a total of  91.00  from holding Royce Special Equity or generate 6.45% return on investment over 90 days.

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

Cohen Steers Realty  vs.  Royce Special Equity

Cohen Steers Realty

Risk-Adjusted Performance

Weakest

Over the last 90 days Cohen Steers Realty has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Royce Special Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Royce Special Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Royce Special may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Cohen Steers and Royce Special

The main advantage of trading using opposite Cohen Steers and Royce Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers position performs unexpectedly, Royce Special 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 Royce Special will offset losses from the drop in Royce Special's long position.

The idea behind Cohen Steers Realty and Royce Special Equity 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.