Correlation Between Heartland Value and Tiaa-cref Social

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

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

Diversification Opportunities for Heartland Value and Tiaa-cref Social

0.77

Correlation Coefficient

Heartland Value  Tiaa-cref Social

Poor diversification

The 3 months correlation between Heartland and Tiaa-cref is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Value Fund and Tiaa Cref Social Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Social and Heartland Value 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 Heartland Value Fund are associated (or correlated) with Tiaa-cref Social. 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 Social has no effect on the direction of Heartland Value i.e., Heartland Value and Tiaa-cref Social go up and down completely randomly.

Pair Corralation between Heartland Value and Tiaa-cref Social

Assuming the 90 days horizon Heartland Value is expected to generate 1.21 times less return on investment than Tiaa-cref Social. In addition to that, Heartland Value is 1.15 times more volatile than Tiaa Cref Social Choice. It trades about 0.04 of its total potential returns per unit of risk. Tiaa Cref Social Choice is currently generating about 0.05 per unit of volatility. If you would invest  2,154  in Tiaa Cref Social Choice on December 2, 2024 and sell it today you would earn a total of  529.00  from holding Tiaa Cref Social Choice or generate 24.56% return on investment over 90 days.

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

Heartland Value Fund  vs.  Tiaa Cref Social Choice

Heartland Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartland Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Tiaa Cref Social

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Social Choice has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Heartland Value and Tiaa-cref Social

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

The idea behind Heartland Value Fund and Tiaa Cref Social Choice 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.