Correlation Between Applied Finance and Tiaa-cref Emerging

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

By analyzing existing cross correlation between Applied Finance Explorer and Tiaa Cref Emerging Markets, you can compare the effects of market volatilities on Applied Finance and Tiaa-cref Emerging 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 Applied Finance with a short position of Tiaa-cref Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Tiaa-cref Emerging.

Diversification Opportunities for Applied Finance and Tiaa-cref Emerging

-0.25

Correlation Coefficient

Applied Finance  Tiaa-cref Emerging

Very good diversification

The 3 months correlation between Applied and Tiaa-cref is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Tiaa Cref Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Emerging and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Tiaa-cref Emerging. 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 Emerging has no effect on the direction of Applied Finance i.e., Applied Finance and Tiaa-cref Emerging go up and down completely randomly.

Pair Corralation between Applied Finance and Tiaa-cref Emerging

Assuming the 90 days horizon Applied Finance Explorer is expected to under-perform the Tiaa-cref Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Applied Finance Explorer is 1.09 times less risky than Tiaa-cref Emerging. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Tiaa Cref Emerging Markets is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  792.00  in Tiaa Cref Emerging Markets on December 22, 2024 and sell it today you would earn a total of  33.00  from holding Tiaa Cref Emerging Markets or generate 4.17% return on investment over 90 days.

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

Applied Finance Explorer  vs.  Tiaa Cref Emerging Markets

Applied Finance Explorer

Risk-Adjusted Performance

Very Weak

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

Tiaa Cref Emerging

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Emerging Markets are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Tiaa-cref Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Applied Finance and Tiaa-cref Emerging

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

The idea behind Applied Finance Explorer and Tiaa Cref Emerging Markets 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.

Check out your portfolio center.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.