Correlation Between Tiaa Cref and Franklin Fund

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

By analyzing existing cross correlation between Tiaa Cref Large Cap Value and Franklin Fund Allocator, you can compare the effects of market volatilities on Tiaa Cref and Franklin Fund 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 Franklin Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Franklin Fund.

Diversification Opportunities for Tiaa Cref and Franklin Fund

0.4

Correlation Coefficient

Tiaa Cref  Franklin Fund

Very weak diversification

The 3 months correlation between Tiaa and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Franklin Fund Allocator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Fund Allocator 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 Large Cap Value are associated (or correlated) with Franklin Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Fund Allocator has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Franklin Fund go up and down completely randomly.

Pair Corralation between Tiaa Cref and Franklin Fund

Assuming the 90 days horizon Tiaa Cref is expected to generate 2.29 times less return on investment than Franklin Fund. But when comparing it to its historical volatility, Tiaa Cref Large Cap Value is 1.15 times less risky than Franklin Fund. It trades about 0.05 of its potential returns per unit of risk. Franklin Fund Allocator is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,026  in Franklin Fund Allocator on December 25, 2024 and sell it today you would earn a total of  51.00  from holding Franklin Fund Allocator or generate 4.97% return on investment over 90 days.

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

Tiaa Cref Large Cap Value  vs.  Franklin Fund Allocator

Tiaa Cref Large

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Large Cap Value are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Fund Allocator

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Fund Allocator are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Franklin Fund 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 Franklin Fund

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

The idea behind Tiaa Cref Large Cap Value and Franklin Fund Allocator 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.