Correlation Between Tiaa Cref and Barings Emerging

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

By analyzing existing cross correlation between Tiaa Cref Inflation Linked Bond and Barings Emerging Markets, you can compare the effects of market volatilities on Tiaa Cref and Barings Emerging 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 Tiaa Cref with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Barings Emerging.

Diversification Opportunities for Tiaa Cref and Barings Emerging

0.76

Correlation Coefficient

Tiaa Cref  Barings Emerging

Poor diversification

The 3 months correlation between Tiaa and Barings is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Inflation Linked Bon and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Tiaa Cref 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 Tiaa Cref Inflation Linked Bond are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Barings Emerging go up and down completely randomly.

Pair Corralation between Tiaa Cref and Barings Emerging

Assuming the 90 days horizon Tiaa Cref Inflation Linked Bond is expected to under-perform the Barings Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Inflation Linked Bond is 1.65 times less risky than Barings Emerging. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Barings Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  754.00  in Barings Emerging Markets on September 5, 2024 and sell it today you would earn a total of  4.00  from holding Barings Emerging Markets or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Tiaa Cref Inflation Linked Bon  vs.  Barings Emerging Markets

Tiaa Cref Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Barings Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Barings Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Barings Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa Cref and Barings Emerging

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

The idea behind Tiaa Cref Inflation Linked Bond and Barings Emerging Markets 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.