Correlation Between Tiaa Cref and Nationwide Global

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

By analyzing existing cross correlation between Tiaa Cref Inflation Link and Nationwide Global Equity, you can compare the effects of market volatilities on Tiaa Cref and Nationwide Global 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 Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Nationwide Global.

Diversification Opportunities for Tiaa Cref and Nationwide Global

0.7

Correlation Coefficient

Tiaa Cref  Nationwide Global

Poor diversification

The 3 months correlation between Tiaa and Nationwide is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Inflation Link and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity 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 Link are associated (or correlated) with Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Nationwide Global go up and down completely randomly.

Pair Corralation between Tiaa Cref and Nationwide Global

Assuming the 90 days horizon Tiaa Cref Inflation Link is expected to generate 0.16 times more return on investment than Nationwide Global. However, Tiaa Cref Inflation Link is 6.38 times less risky than Nationwide Global. It trades about -0.02 of its potential returns per unit of risk. Nationwide Global Equity is currently generating about -0.07 per unit of risk. If you would invest  1,056  in Tiaa Cref Inflation Link on October 22, 2024 and sell it today you would lose (3.00) from holding Tiaa Cref Inflation Link or give up 0.28% of portfolio value over 90 days.

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

Tiaa Cref Inflation Link  vs.  Nationwide Global Equity

Tiaa Cref Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nationwide Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Nationwide Global 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 Nationwide Global

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

The idea behind Tiaa Cref Inflation Link and Nationwide Global Equity 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..