Correlation Between Tiaa-cref Intl and Davis Government

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

By analyzing existing cross correlation between Tiaa Cref Intl Small Cap and Davis Government Bond, you can compare the effects of market volatilities on Tiaa-cref Intl and Davis Government 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 Intl with a short position of Davis Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Intl and Davis Government.

Diversification Opportunities for Tiaa-cref Intl and Davis Government

0.69

Correlation Coefficient

Tiaa-cref Intl  Davis Government

Poor diversification

The 3 months correlation between Tiaa-cref and Davis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Intl Small Cap and Davis Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Government Bond and Tiaa-cref Intl 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 Intl Small Cap are associated (or correlated) with Davis Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Government Bond has no effect on the direction of Tiaa-cref Intl i.e., Tiaa-cref Intl and Davis Government go up and down completely randomly.

Pair Corralation between Tiaa-cref Intl and Davis Government

Assuming the 90 days horizon Tiaa Cref Intl Small Cap is expected to generate 4.46 times more return on investment than Davis Government. However, Tiaa-cref Intl is 4.46 times more volatile than Davis Government Bond. It trades about 0.29 of its potential returns per unit of risk. Davis Government Bond is currently generating about 0.16 per unit of risk. If you would invest  1,218  in Tiaa Cref Intl Small Cap on May 20, 2025 and sell it today you would earn a total of  146.00  from holding Tiaa Cref Intl Small Cap or generate 11.99% return on investment over 90 days.

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

Tiaa Cref Intl Small Cap  vs.  Davis Government Bond

Tiaa Cref Intl

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Intl Small Cap are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa-cref Intl may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Davis Government Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Davis Government Bond are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Davis Government 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 Intl and Davis Government

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

The idea behind Tiaa Cref Intl Small Cap and Davis Government Bond 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.