Correlation Between State Street and Tiaa Cref
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Real and Tiaa Cref Real Estate, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Tiaa Cref.
Diversification Opportunities for State Street and Tiaa Cref
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and Tiaa is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding State Street Real and Tiaa Cref Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Real and State Street 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 State Street Real 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 Real has no effect on the direction of State Street i.e., State Street and Tiaa Cref go up and down completely randomly.
Pair Corralation between State Street and Tiaa Cref
Assuming the 90 days horizon State Street is expected to generate 1.29 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, State Street Real is 1.01 times less risky than Tiaa Cref. It trades about 0.07 of its potential returns per unit of risk. Tiaa Cref Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,880 in Tiaa Cref Real Estate on November 3, 2024 and sell it today you would earn a total of 38.00 from holding Tiaa Cref Real Estate or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Real vs. Tiaa Cref Real Estate
Performance |
| Timeline |
| State Street Real |
| Tiaa Cref Real |
State Street and Tiaa Cref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Tiaa Cref
The main advantage of trading using opposite State Street and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Oakhurst Short Duration | State Street vs. Blackrock Short Obligations | State Street vs. Leader Short Term Bond | State Street vs. Virtus Multi Sector Short |
| Tiaa Cref vs. Ab Bond Inflation | Tiaa Cref vs. Asg Managed Futures | Tiaa Cref vs. Tiaa Cref Inflation Linked Bond | Tiaa Cref vs. Lord Abbett Inflation |
Check out your portfolio center.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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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