Correlation Between Aristotle Funds and Tiaa Cref

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

By analyzing existing cross correlation between Aristotle Funds Series and Tiaa Cref High Yield Fund, you can compare the effects of market volatilities on Aristotle Funds 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 Aristotle Funds with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Tiaa Cref.

Diversification Opportunities for Aristotle Funds and Tiaa Cref

0.16

Correlation Coefficient

Aristotle Funds  Tiaa Cref

Average diversification

The 3 months correlation between Aristotle and Tiaa is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Tiaa Cref High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref High and Aristotle Funds 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 Aristotle Funds Series 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 High has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Tiaa Cref go up and down completely randomly.

Pair Corralation between Aristotle Funds and Tiaa Cref

Assuming the 90 days horizon Aristotle Funds Series is expected to under-perform the Tiaa Cref. In addition to that, Aristotle Funds is 5.73 times more volatile than Tiaa Cref High Yield Fund. It trades about -0.08 of its total potential returns per unit of risk. Tiaa Cref High Yield Fund is currently generating about 0.12 per unit of volatility. If you would invest  869.00  in Tiaa Cref High Yield Fund on December 23, 2024 and sell it today you would earn a total of  13.00  from holding Tiaa Cref High Yield Fund or generate 1.5% return on investment over 90 days.

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

Aristotle Funds Series  vs.  Tiaa Cref High Yield Fund

Aristotle Funds Series

Risk-Adjusted Performance

Very Weak

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

Tiaa Cref High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref High Yield Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristotle Funds and Tiaa Cref

The main advantage of trading using opposite Aristotle Funds and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds 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 Aristotle Funds Series and Tiaa Cref High Yield Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.