Correlation Between Health Biotchnology and Tiaa Cref

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

By analyzing existing cross correlation between Health Biotchnology Portfolio and Tiaa Cref Mid Cap Growth, you can compare the effects of market volatilities on Health Biotchnology 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 Health Biotchnology with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Biotchnology and Tiaa Cref.

Diversification Opportunities for Health Biotchnology and Tiaa Cref

0.45

Correlation Coefficient

Health Biotchnology  Tiaa Cref

Very weak diversification

The 3 months correlation between Health and Tiaa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Health Biotchnology Portfolio and Tiaa Cref Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Mid and Health Biotchnology 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 Health Biotchnology Portfolio 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 Mid has no effect on the direction of Health Biotchnology i.e., Health Biotchnology and Tiaa Cref go up and down completely randomly.

Pair Corralation between Health Biotchnology and Tiaa Cref

Assuming the 90 days horizon Health Biotchnology Portfolio is expected to generate 0.68 times more return on investment than Tiaa Cref. However, Health Biotchnology Portfolio is 1.46 times less risky than Tiaa Cref. It trades about -0.04 of its potential returns per unit of risk. Tiaa Cref Mid Cap Growth is currently generating about -0.41 per unit of risk. If you would invest  2,392  in Health Biotchnology Portfolio on December 4, 2024 and sell it today you would lose (19.00) from holding Health Biotchnology Portfolio or give up 0.79% of portfolio value over 90 days.

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

Health Biotchnology Portfolio  vs.  Tiaa Cref Mid Cap Growth

Health Biotchnology

Risk-Adjusted Performance

Very Weak

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

Tiaa Cref Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Mid Cap Growth 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.

Pair Trading with Health Biotchnology and Tiaa Cref

The main advantage of trading using opposite Health Biotchnology and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Biotchnology 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 Health Biotchnology Portfolio and Tiaa Cref Mid 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.