Correlation Between Tiaa-cref Real and Guidemark(r) Small/mid

Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Real and Guidemark(r) Small/mid 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 Real and Guidemark(r) Small/mid 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 Guidemark Smallmid Cap, you can compare the effects of market volatilities on Tiaa-cref Real and Guidemark(r) Small/mid 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 Real with a short position of Guidemark(r) Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Real and Guidemark(r) Small/mid.

Diversification Opportunities for Tiaa-cref Real and Guidemark(r) Small/mid

0.68

Correlation Coefficient

Tiaa-cref Real  Guidemark(r) Small/mid

Poor diversification

The 3 months correlation between Tiaa-cref and Guidemark(r) is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Real Estate and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap and Tiaa-cref Real 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 Guidemark(r) Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Tiaa-cref Real i.e., Tiaa-cref Real and Guidemark(r) Small/mid go up and down completely randomly.

Pair Corralation between Tiaa-cref Real and Guidemark(r) Small/mid

Assuming the 90 days horizon Tiaa-cref Real is expected to generate 1.56 times less return on investment than Guidemark(r) Small/mid. But when comparing it to its historical volatility, Tiaa Cref Real Estate is 1.08 times less risky than Guidemark(r) Small/mid. It trades about 0.02 of its potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,835  in Guidemark Smallmid Cap on October 24, 2024 and sell it today you would earn a total of  202.00  from holding Guidemark Smallmid Cap or generate 11.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Tiaa Cref Real Estate  vs.  Guidemark Smallmid Cap

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 fairly strong basic indicators, Tiaa-cref Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Smallmid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Guidemark(r) Small/mid 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 Real and Guidemark(r) Small/mid

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

The idea behind Tiaa Cref Real Estate and Guidemark Smallmid Cap 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.