Correlation Between Catalyst/millburn and Tiaa Cref

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

By analyzing existing cross correlation between Catalystmillburn Hedge Strategy and Tiaa Cref Large Cap Growth, you can compare the effects of market volatilities on Catalyst/millburn 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 Catalyst/millburn with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Tiaa Cref.

Diversification Opportunities for Catalyst/millburn and Tiaa Cref

0.78

Correlation Coefficient

Catalyst/millburn  Tiaa Cref

Poor diversification

The 3 months correlation between Catalyst/millburn and Tiaa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Tiaa Cref Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Large and Catalyst/millburn 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 Catalystmillburn Hedge Strategy 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 Large has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Tiaa Cref go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Tiaa Cref

Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 0.48 times more return on investment than Tiaa Cref. However, Catalystmillburn Hedge Strategy is 2.11 times less risky than Tiaa Cref. It trades about -0.04 of its potential returns per unit of risk. Tiaa Cref Large Cap Growth is currently generating about -0.1 per unit of risk. If you would invest  3,887  in Catalystmillburn Hedge Strategy on December 25, 2024 and sell it today you would lose (69.00) from holding Catalystmillburn Hedge Strategy or give up 1.78% of portfolio value over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Tiaa Cref Large Cap Growth

Catalystmillburn Hedge

Risk-Adjusted Performance

Very Weak

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

Tiaa Cref Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Large Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward 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 Catalyst/millburn and Tiaa Cref

The main advantage of trading using opposite Catalyst/millburn and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn 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 Catalystmillburn Hedge Strategy and Tiaa Cref Large Cap Growth 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.