Correlation Between Tiaa-cref Managed and Gmo Core

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

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

Diversification Opportunities for Tiaa-cref Managed and Gmo Core

0.63

Correlation Coefficient

Tiaa-cref Managed  Gmo Core

Poor diversification

The 3 months correlation between Tiaa-cref and Gmo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Managed Allocation and Gmo E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo E Plus and Tiaa-cref Managed 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 Managed Allocation are associated (or correlated) with Gmo Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo E Plus has no effect on the direction of Tiaa-cref Managed i.e., Tiaa-cref Managed and Gmo Core go up and down completely randomly.

Pair Corralation between Tiaa-cref Managed and Gmo Core

Assuming the 90 days horizon Tiaa Cref Managed Allocation is expected to generate 1.46 times more return on investment than Gmo Core. However, Tiaa-cref Managed is 1.46 times more volatile than Gmo E Plus. It trades about 0.26 of its potential returns per unit of risk. Gmo E Plus is currently generating about 0.18 per unit of risk. If you would invest  1,260  in Tiaa Cref Managed Allocation on May 28, 2025 and sell it today you would earn a total of  82.00  from holding Tiaa Cref Managed Allocation or generate 6.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Tiaa Cref Managed Allocation  vs.  Gmo E Plus

Tiaa Cref Managed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Managed Allocation are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Tiaa-cref Managed may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Gmo E Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo E Plus are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gmo Core 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 Managed and Gmo Core

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

The idea behind Tiaa Cref Managed Allocation and Gmo E Plus 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.