Correlation Between Tiaa-cref Large-cap and Tiaa Cref

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

By analyzing existing cross correlation between Tiaa Cref Large Cap Value and Tiaa Cref Equity Index, you can compare the effects of market volatilities on Tiaa-cref Large-cap and Tiaa Cref 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 Large-cap with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and Tiaa Cref.

Diversification Opportunities for Tiaa-cref Large-cap and Tiaa Cref

0.97

Correlation Coefficient

Tiaa-cref Large-cap  Tiaa Cref

Almost no diversification

The 3 months correlation between Tiaa-cref and Tiaa is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Tiaa Cref Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Equity and Tiaa-cref Large-cap 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 Large Cap Value are associated (or correlated) with Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Equity has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Tiaa Cref go up and down completely randomly.

Pair Corralation between Tiaa-cref Large-cap and Tiaa Cref

Assuming the 90 days horizon Tiaa-cref Large-cap is expected to generate 1.39 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Tiaa Cref Large Cap Value is 1.12 times less risky than Tiaa Cref. It trades about 0.17 of its potential returns per unit of risk. Tiaa Cref Equity Index is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,891  in Tiaa Cref Equity Index on September 3, 2024 and sell it today you would earn a total of  404.00  from holding Tiaa Cref Equity Index or generate 10.38% return on investment over 90 days.

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

Tiaa Cref Large Cap Value  vs.  Tiaa Cref Equity Index

Tiaa-cref Large-cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Large Cap Value are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa-cref Large-cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tiaa Cref Equity

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Equity Index are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tiaa-cref Large-cap and Tiaa Cref

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

The idea behind Tiaa Cref Large Cap Value and Tiaa Cref Equity Index 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.