Correlation Between Tiaa Cref and Putnam Retirement

Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and Putnam Retirement 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 Putnam Retirement 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 Putnam Retirement Advantage, you can compare the effects of market volatilities on Tiaa Cref and Putnam Retirement 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 Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Putnam Retirement.

Diversification Opportunities for Tiaa Cref and Putnam Retirement

0.94

Correlation Coefficient

Tiaa Cref  Putnam Retirement

Almost no diversification

The 3 months correlation between Tiaa and Putnam is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Lifestyle Moderate and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement 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 Lifestyle Moderate are associated (or correlated) with Putnam Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Retirement has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Putnam Retirement go up and down completely randomly.

Pair Corralation between Tiaa Cref and Putnam Retirement

Assuming the 90 days horizon Tiaa Cref Lifestyle Moderate is expected to generate 0.61 times more return on investment than Putnam Retirement. However, Tiaa Cref Lifestyle Moderate is 1.63 times less risky than Putnam Retirement. It trades about 0.15 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about 0.02 per unit of risk. If you would invest  1,480  in Tiaa Cref Lifestyle Moderate on October 24, 2024 and sell it today you would earn a total of  22.00  from holding Tiaa Cref Lifestyle Moderate or generate 1.49% return on investment 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.  Putnam Retirement Advantage

Tiaa Cref Lifestyle

Risk-Adjusted Performance

3 of 100

Insignificant

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

Putnam Retirement

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Retirement Advantage are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Putnam Retirement 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 Putnam Retirement

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

The idea behind Tiaa Cref Lifestyle Moderate and Putnam Retirement Advantage 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.