Correlation Between Nasdaq 100 and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 Fund Class and Tiaa Cref Growth Income, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Tiaa Cref.

Diversification Opportunities for Nasdaq 100 and Tiaa Cref

0.51

Correlation Coefficient

Nasdaq 100  Tiaa Cref

Very weak diversification

The 3 months correlation between Nasdaq and Tiaa is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Tiaa Cref Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Growth and Nasdaq 100 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 Nasdaq 100 Fund Class 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 Growth has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Tiaa Cref go up and down completely randomly.

Pair Corralation between Nasdaq 100 and Tiaa Cref

Assuming the 90 days horizon Nasdaq 100 Fund Class is expected to generate 0.91 times more return on investment than Tiaa Cref. However, Nasdaq 100 Fund Class is 1.09 times less risky than Tiaa Cref. It trades about -0.04 of its potential returns per unit of risk. Tiaa Cref Growth Income is currently generating about -0.16 per unit of risk. If you would invest  7,647  in Nasdaq 100 Fund Class on September 17, 2024 and sell it today you would lose (140.00) from holding Nasdaq 100 Fund Class or give up 1.83% of portfolio value over 90 days.

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

Nasdaq 100 Fund Class  vs.  Tiaa Cref Growth Income

Nasdaq 100 Fund

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Fund Class are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nasdaq 100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Growth Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward 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 Nasdaq 100 and Tiaa Cref

The main advantage of trading using opposite Nasdaq 100 and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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 Nasdaq 100 Fund Class and Tiaa Cref Growth Income 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.