Correlation Between Tiaa-cref Lifestyle and Calvert Moderate

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

By analyzing existing cross correlation between Tiaa Cref Lifestyle Moderate and Calvert Moderate Allocation, you can compare the effects of market volatilities on Tiaa-cref Lifestyle and Calvert Moderate 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 Lifestyle with a short position of Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Lifestyle and Calvert Moderate.

Diversification Opportunities for Tiaa-cref Lifestyle and Calvert Moderate

0.98

Correlation Coefficient

Tiaa-cref Lifestyle  Calvert Moderate

Almost no diversification

The 3 months correlation between Tiaa-cref and Calvert is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Lifestyle Moderate and Calvert Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Moderate All and Tiaa-cref Lifestyle 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 Lifestyle Moderate are associated (or correlated) with Calvert Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Moderate All has no effect on the direction of Tiaa-cref Lifestyle i.e., Tiaa-cref Lifestyle and Calvert Moderate go up and down completely randomly.

Pair Corralation between Tiaa-cref Lifestyle and Calvert Moderate

Assuming the 90 days horizon Tiaa Cref Lifestyle Moderate is expected to under-perform the Calvert Moderate. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Lifestyle Moderate is 1.0 times less risky than Calvert Moderate. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Calvert Moderate Allocation is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,035  in Calvert Moderate Allocation on December 29, 2024 and sell it today you would lose (19.00) from holding Calvert Moderate Allocation or give up 0.93% of portfolio value over 90 days.

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

Tiaa Cref Lifestyle Moderate  vs.  Calvert Moderate Allocation

Tiaa Cref Lifestyle

Risk-Adjusted Performance

Very Weak

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

Calvert Moderate All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calvert Moderate Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Calvert Moderate 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 Lifestyle and Calvert Moderate

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

The idea behind Tiaa Cref Lifestyle Moderate and Calvert Moderate Allocation 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.