Can any of the company-specific risk be diversified away by investing in both Cohen Steers and Jpmorgan Preferred 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 Jpmorgan Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Preferd and Jpmorgan Preferred And, you can compare the effects of market volatilities on Cohen Steers and Jpmorgan Preferred 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 Jpmorgan Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Jpmorgan Preferred.
Diversification Opportunities for Cohen Steers and Jpmorgan Preferred
The 3 months correlation between Cohen and Jpmorgan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Preferd and Jpmorgan Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Preferred And 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 Preferd are associated (or correlated) with Jpmorgan Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Preferred And has no effect on the direction of Cohen Steers i.e., Cohen Steers and Jpmorgan Preferred go up and down completely randomly.
Pair Corralation between Cohen Steers and Jpmorgan Preferred
Assuming the 90 days horizon Cohen Steers Preferd is expected to generate 1.05 times more return on investment than Jpmorgan Preferred. However, Cohen Steers is 1.05 times more volatile than Jpmorgan Preferred And. It trades about 0.23 of its potential returns per unit of risk. Jpmorgan Preferred And is currently generating about 0.17 per unit of risk. If you would invest 1,192 in Cohen Steers Preferd on March 6, 2024 and sell it today you would earn a total of 9.00 from holding Cohen Steers Preferd or generate 0.76% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Preferd are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. 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.
Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Preferred And are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.