Correlation Between Tiaa Cref and Causeway Global

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

By analyzing existing cross correlation between Tiaa Cref Small Cap Equity and Causeway Global Value, you can compare the effects of market volatilities on Tiaa Cref and Causeway Global 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 Causeway Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Causeway Global.

Diversification Opportunities for Tiaa Cref and Causeway Global

0.98

Correlation Coefficient

Tiaa Cref  Causeway Global

Almost no diversification

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

Pair Corralation between Tiaa Cref and Causeway Global

Assuming the 90 days horizon Tiaa Cref is expected to generate 1.22 times less return on investment than Causeway Global. In addition to that, Tiaa Cref is 1.22 times more volatile than Causeway Global Value. It trades about 0.19 of its total potential returns per unit of risk. Causeway Global Value is currently generating about 0.28 per unit of volatility. If you would invest  1,274  in Causeway Global Value on May 1, 2025 and sell it today you would earn a total of  197.00  from holding Causeway Global Value or generate 15.46% 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 Small Cap Equity  vs.  Causeway Global Value

Tiaa Cref Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Small Cap Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Causeway Global Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Causeway Global Value are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Causeway Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tiaa Cref and Causeway Global

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

The idea behind Tiaa Cref Small Cap Equity and Causeway Global Value 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.