Correlation Between Tiaa-cref Large-cap and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Large-cap and Litman Gregory 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 Large-cap and Litman Gregory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Large Cap Value and Litman Gregory Masters, you can compare the effects of market volatilities on Tiaa-cref Large-cap and Litman Gregory 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 Large-cap with a short position of Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and Litman Gregory.
Diversification Opportunities for Tiaa-cref Large-cap and Litman Gregory
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tiaa-cref and Litman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Litman Gregory Masters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Masters and Tiaa-cref Large-cap 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 Large Cap Value are associated (or correlated) with Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Masters has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Litman Gregory go up and down completely randomly.
Pair Corralation between Tiaa-cref Large-cap and Litman Gregory
Assuming the 90 days horizon Tiaa Cref Large Cap Value is expected to generate 6.73 times more return on investment than Litman Gregory. However, Tiaa-cref Large-cap is 6.73 times more volatile than Litman Gregory Masters. It trades about 0.36 of its potential returns per unit of risk. Litman Gregory Masters is currently generating about 0.26 per unit of risk. If you would invest 2,304 in Tiaa Cref Large Cap Value on September 3, 2024 and sell it today you would earn a total of 133.00 from holding Tiaa Cref Large Cap Value or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Large Cap Value vs. Litman Gregory Masters
Performance |
| Timeline |
| Tiaa-cref Large-cap |
| Litman Gregory Masters |
Tiaa-cref Large-cap and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Large-cap and Litman Gregory
The main advantage of trading using opposite Tiaa-cref Large-cap and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Large-cap position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| Tiaa-cref Large-cap vs. Tiaa Cref Mid Cap Value | Tiaa-cref Large-cap vs. Tiaa Cref International Equity | Tiaa-cref Large-cap vs. Tiaa Cref Mid Cap Growth | Tiaa-cref Large-cap vs. Tiaa Cref Small Cap Equity |
| Litman Gregory vs. Vanguard Financials Index | Litman Gregory vs. Icon Financial Fund | Litman Gregory vs. Blackrock Financial Institutions | Litman Gregory vs. Mesirow Financial Small |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |