Correlation Between Tiaa Cref and Highland Longshort

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

By analyzing existing cross correlation between Tiaa Cref Small Cap Equity and Highland Longshort Healthcare, you can compare the effects of market volatilities on Tiaa Cref and Highland Longshort 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 Tiaa Cref with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Highland Longshort.

Diversification Opportunities for Tiaa Cref and Highland Longshort

0.61

Correlation Coefficient

Tiaa Cref  Highland Longshort

Poor diversification

The 3 months correlation between Tiaa and Highland is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Equity and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Tiaa Cref 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 Tiaa Cref Small Cap Equity are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Highland Longshort go up and down completely randomly.

Pair Corralation between Tiaa Cref and Highland Longshort

Assuming the 90 days horizon Tiaa Cref Small Cap Equity is expected to under-perform the Highland Longshort. In addition to that, Tiaa Cref is 21.45 times more volatile than Highland Longshort Healthcare. It trades about -0.17 of its total potential returns per unit of risk. Highland Longshort Healthcare is currently generating about -0.02 per unit of volatility. If you would invest  1,657  in Highland Longshort Healthcare on September 15, 2024 and sell it today you would lose (1.00) from holding Highland Longshort Healthcare or give up 0.06% of portfolio value over 90 days.

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

Tiaa Cref Small Cap Equity  vs.  Highland Longshort Healthcare

Tiaa Cref Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Small Cap Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Highland Longshort

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Longshort Healthcare are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Highland Longshort is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa Cref and Highland Longshort

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

The idea behind Tiaa Cref Small Cap Equity and Highland Longshort Healthcare 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..