Correlation Between Flaherty and Cohen Steers

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

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

Diversification Opportunities for Flaherty and Cohen Steers

0.74

Correlation Coefficient

Flaherty  Cohen Steers

Poor diversification

The 3 months correlation between Flaherty and Cohen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Flaherty and Crumrine 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 Flaherty 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 Flaherty and Crumrine 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 Flaherty i.e., Flaherty and Cohen Steers go up and down completely randomly.

Pair Corralation between Flaherty and Cohen Steers

Considering the 90-day investment horizon Flaherty is expected to generate 1.67 times less return on investment than Cohen Steers. But when comparing it to its historical volatility, Flaherty and Crumrine is 1.15 times less risky than Cohen Steers. It trades about 0.17 of its potential returns per unit of risk. Cohen Steers Limited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,932  in Cohen Steers Limited on August 15, 2024 and sell it today you would earn a total of  200.00  from holding Cohen Steers Limited or generate 10.35% return on investment over 90 days.

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

Flaherty and Crumrine  vs.  Cohen Steers Limited

Flaherty and Crumrine

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty and Crumrine are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Flaherty is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cohen Steers Limited

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Limited are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively inconsistent fundamental indicators, Cohen Steers may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Flaherty and Cohen Steers

The main advantage of trading using opposite Flaherty and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flaherty 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 Flaherty and Crumrine 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 Stocks Directory module to find actively traded stocks across global markets.