Correlation Between Tiaa Cref and Tiaa-cref Social

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

By analyzing existing cross correlation between Tiaa Cref Equity Index and Tiaa Cref Social Choice, you can compare the effects of market volatilities on Tiaa Cref and Tiaa-cref Social 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 Tiaa-cref Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Tiaa-cref Social.

Diversification Opportunities for Tiaa Cref and Tiaa-cref Social

0.84

Correlation Coefficient

Tiaa Cref  Tiaa-cref Social

Very poor diversification

The 3 months correlation between Tiaa and Tiaa-cref is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Equity Index and Tiaa Cref Social Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Social 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 Equity Index are associated (or correlated) with Tiaa-cref Social. 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 Social has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Tiaa-cref Social go up and down completely randomly.

Pair Corralation between Tiaa Cref and Tiaa-cref Social

Assuming the 90 days horizon Tiaa Cref Equity Index is expected to generate 0.37 times more return on investment than Tiaa-cref Social. However, Tiaa Cref Equity Index is 2.7 times less risky than Tiaa-cref Social. It trades about 0.19 of its potential returns per unit of risk. Tiaa Cref Social Choice is currently generating about -0.04 per unit of risk. If you would invest  3,901  in Tiaa Cref Equity Index on September 11, 2024 and sell it today you would earn a total of  342.00  from holding Tiaa Cref Equity Index or generate 8.77% return on investment over 90 days.

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

Tiaa Cref Equity Index  vs.  Tiaa Cref Social Choice

Tiaa Cref Equity

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Equity Index are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tiaa Cref Social

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Social Choice has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Tiaa-cref Social 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 Tiaa-cref Social

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

The idea behind Tiaa Cref Equity Index and Tiaa Cref Social Choice 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.