Correlation Between Federated Kaufmann and Tiaa-cref Real

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

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

Diversification Opportunities for Federated Kaufmann and Tiaa-cref Real

0.09

Correlation Coefficient

Federated Kaufmann  Tiaa-cref Real

Significant diversification

The 3 months correlation between FEDERATED and Tiaa-cref is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Tiaa Cref Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Real and Federated Kaufmann 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 Federated Kaufmann Large are associated (or correlated) with Tiaa-cref Real. 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 Real has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Tiaa-cref Real go up and down completely randomly.

Pair Corralation between Federated Kaufmann and Tiaa-cref Real

Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 0.96 times more return on investment than Tiaa-cref Real. However, Federated Kaufmann Large is 1.04 times less risky than Tiaa-cref Real. It trades about 0.38 of its potential returns per unit of risk. Tiaa Cref Real Estate is currently generating about 0.2 per unit of risk. If you would invest  1,862  in Federated Kaufmann Large on September 1, 2024 and sell it today you would earn a total of  137.00  from holding Federated Kaufmann Large or generate 7.36% return on investment over 90 days.

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

Federated Kaufmann Large  vs.  Tiaa Cref Real Estate

Federated Kaufmann Large

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Kaufmann Large are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Federated Kaufmann may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Tiaa Cref Real

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Federated Kaufmann and Tiaa-cref Real

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

The idea behind Federated Kaufmann Large and Tiaa Cref Real Estate 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.