Correlation Between Tiaa Cref and Sprucegrove International

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

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

Diversification Opportunities for Tiaa Cref and Sprucegrove International

0.87

Correlation Coefficient

Tiaa Cref  Sprucegrove International

Very poor diversification

The 3 months correlation between Tiaa and Sprucegrove is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Real Estate and Sprucegrove International Equi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprucegrove International 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 Real Estate are associated (or correlated) with Sprucegrove International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprucegrove International has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Sprucegrove International go up and down completely randomly.

Pair Corralation between Tiaa Cref and Sprucegrove International

Assuming the 90 days horizon Tiaa Cref is expected to generate 1.1 times less return on investment than Sprucegrove International. In addition to that, Tiaa Cref is 1.47 times more volatile than Sprucegrove International Equity. It trades about 0.03 of its total potential returns per unit of risk. Sprucegrove International Equity is currently generating about 0.05 per unit of volatility. If you would invest  6,533  in Sprucegrove International Equity on October 23, 2024 and sell it today you would earn a total of  40.00  from holding Sprucegrove International Equity or generate 0.61% return on investment over 90 days.

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

Tiaa Cref Real Estate  vs.  Sprucegrove International Equi

Tiaa Cref Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Sprucegrove International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprucegrove International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tiaa Cref and Sprucegrove International

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

The idea behind Tiaa Cref Real Estate and Sprucegrove International 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.