Correlation Between Cohen Steers and Principal Real

Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Principal Real 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 Principal Real 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 Principal Real Estate, you can compare the effects of market volatilities on Cohen Steers and Principal Real 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 Principal Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Principal Real.

Diversification Opportunities for Cohen Steers and Principal Real

0.48

Correlation Coefficient

Cohen Steers  Principal Real

Very weak diversification

The 3 months correlation between Cohen and Principal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Realty and Principal Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Real Estate 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 Principal Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Real Estate has no effect on the direction of Cohen Steers i.e., Cohen Steers and Principal Real go up and down completely randomly.

Pair Corralation between Cohen Steers and Principal Real

Assuming the 90 days horizon Cohen Steers Realty is expected to under-perform the Principal Real. In addition to that, Cohen Steers is 1.86 times more volatile than Principal Real Estate. It trades about -0.04 of its total potential returns per unit of risk. Principal Real Estate is currently generating about 0.01 per unit of volatility. If you would invest  1,148  in Principal Real Estate on May 16, 2025 and sell it today you would earn a total of  3.00  from holding Principal Real Estate or generate 0.26% 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.  Principal Real Estate

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.

Principal Real Estate

Risk-Adjusted Performance

Weakest

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

Pair Trading with Cohen Steers and Principal Real

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

The idea behind Cohen Steers Realty and Principal Real Estate 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.