Correlation Between Tiaa-cref Large-cap and Clearbridge Large

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Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Large-cap and Clearbridge Large 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 Large-cap and Clearbridge Large 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 Growth and Clearbridge Large Cap, you can compare the effects of market volatilities on Tiaa-cref Large-cap and Clearbridge Large 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 Large-cap with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and Clearbridge Large.

Diversification Opportunities for Tiaa-cref Large-cap and Clearbridge Large

1.0
  Correlation Coefficient

No risk reduction

The 3 months correlation between Tiaa-cref and Clearbridge is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding TIAA-CREF Large-Cap Growth and CLEARBRIDGE LARGE CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Tiaa-cref Large-cap 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 Growth are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Clearbridge Large go up and down completely randomly.

Pair Corralation between Tiaa-cref Large-cap and Clearbridge Large

Assuming the 90 days horizon Tiaa Cref Large Cap Growth is expected to generate 1.03 times more return on investment than Clearbridge Large. However, Tiaa-cref Large-cap is 1.03 times more volatile than Clearbridge Large Cap. It trades about 0.15 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.15 per unit of risk. If you would invest  1,872  in Tiaa Cref Large Cap Growth on December 30, 2023 and sell it today you would earn a total of  767.00  from holding Tiaa Cref Large Cap Growth or generate 40.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

TIAA-CREF Large-Cap Growth  vs.  CLEARBRIDGE LARGE CAP

 Performance 
       Timeline  
Tiaa-cref Large-cap 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Large Cap Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa-cref Large-cap showed solid returns over the last few months and may actually be approaching a breakup point.
Clearbridge Large Cap 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Large Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Clearbridge Large showed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa-cref Large-cap and Clearbridge Large Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tiaa-cref Large-cap and Clearbridge Large

The main advantage of trading using opposite Tiaa-cref Large-cap and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Large-cap position performs unexpectedly, Clearbridge Large 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 Clearbridge Large will offset losses from the drop in Clearbridge Large's long position.
The idea behind Tiaa Cref Large Cap Growth and Clearbridge Large 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.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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