Correlation Between Health Care and Tiaa Cref

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

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

Diversification Opportunities for Health Care and Tiaa Cref

0.61

Correlation Coefficient

Health Care  Tiaa Cref

Poor diversification

The 3 months correlation between Health and Tiaa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Ultrasector and Tiaa Cref Lifestyle Conservati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle and Health Care 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 Health Care Ultrasector are associated (or correlated) with Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifestyle has no effect on the direction of Health Care i.e., Health Care and Tiaa Cref go up and down completely randomly.

Pair Corralation between Health Care and Tiaa Cref

Assuming the 90 days horizon Health Care Ultrasector is expected to generate 4.26 times more return on investment than Tiaa Cref. However, Health Care is 4.26 times more volatile than Tiaa Cref Lifestyle Conservative. It trades about 0.21 of its potential returns per unit of risk. Tiaa Cref Lifestyle Conservative is currently generating about 0.13 per unit of risk. If you would invest  9,543  in Health Care Ultrasector on September 4, 2025 and sell it today you would earn a total of  1,844  from holding Health Care Ultrasector or generate 19.32% return on investment over 90 days.

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

Health Care Ultrasector  vs.  Tiaa Cref Lifestyle Conservati

Health Care Ultrasector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Health Care Ultrasector are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Health Care showed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa Cref Lifestyle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifestyle Conservative are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Health Care and Tiaa Cref

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

The idea behind Health Care Ultrasector and Tiaa Cref Lifestyle Conservative 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.