Correlation Between Palmer Square and Tiaa Cref

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

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

Diversification Opportunities for Palmer Square and Tiaa Cref

-0.18

Correlation Coefficient

Palmer Square  Tiaa Cref

Good diversification

The 3 months correlation between Palmer and Tiaa is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ultra Short 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 Palmer Square 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 Palmer Square Ultra Short 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 Real has no effect on the direction of Palmer Square i.e., Palmer Square and Tiaa Cref go up and down completely randomly.

Pair Corralation between Palmer Square and Tiaa Cref

Assuming the 90 days horizon Palmer Square is expected to generate 1.21 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Palmer Square Ultra Short is 16.54 times less risky than Tiaa Cref. It trades about 0.29 of its potential returns per unit of risk. Tiaa Cref Real Estate is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,722  in Tiaa Cref Real Estate on October 4, 2024 and sell it today you would earn a total of  158.00  from holding Tiaa Cref Real Estate or generate 9.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Palmer Square Ultra Short  vs.  Tiaa Cref Real Estate

Palmer Square Ultra

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tiaa Cref Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Real Estate has generated negative risk-adjusted returns adding no value to fund investors. 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 Palmer Square and Tiaa Cref

The main advantage of trading using opposite Palmer Square and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square 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 Palmer Square Ultra Short 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.