Correlation Between Barings Global and Tiaa Cref

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

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

Diversification Opportunities for Barings Global and Tiaa Cref

0.15

Correlation Coefficient

Barings Global  Tiaa Cref

Average diversification

The 3 months correlation between Barings and Tiaa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Tiaa Cref Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Small and Barings Global 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 Barings Global Floating 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 Small has no effect on the direction of Barings Global i.e., Barings Global and Tiaa Cref go up and down completely randomly.

Pair Corralation between Barings Global and Tiaa Cref

Assuming the 90 days horizon Barings Global Floating is expected to generate 0.08 times more return on investment than Tiaa Cref. However, Barings Global Floating is 11.8 times less risky than Tiaa Cref. It trades about -0.16 of its potential returns per unit of risk. Tiaa Cref Small Cap Equity is currently generating about -0.17 per unit of risk. If you would invest  878.00  in Barings Global Floating on October 9, 2024 and sell it today you would lose (3.00) from holding Barings Global Floating or give up 0.34% of portfolio value over 90 days.

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

Barings Global Floating  vs.  Tiaa Cref Small Cap Equity

Barings Global Floating

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Global Floating are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Barings Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Barings Global and Tiaa Cref

The main advantage of trading using opposite Barings Global and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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 Barings Global Floating and Tiaa Cref Small Cap Equity 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.