Correlation Between Western Asset and Tiaa-cref Real
Can any of the company-specific risk be diversified away by investing in both Western Asset and Tiaa-cref Real 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 Western Asset and Tiaa-cref Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Tiaa Cref Real Estate, you can compare the effects of market volatilities on Western Asset and Tiaa-cref Real 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 Western Asset with a short position of Tiaa-cref Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Tiaa-cref Real.
Diversification Opportunities for Western Asset and Tiaa-cref Real
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WESTERN and Tiaa-cref is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation 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 Western Asset 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 Western Asset Inflation are associated (or correlated) with Tiaa-cref Real. 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 Western Asset i.e., Western Asset and Tiaa-cref Real go up and down completely randomly.
Pair Corralation between Western Asset and Tiaa-cref Real
Assuming the 90 days horizon Western Asset is expected to generate 2.34 times less return on investment than Tiaa-cref Real. But when comparing it to its historical volatility, Western Asset Inflation is 4.64 times less risky than Tiaa-cref Real. It trades about 0.19 of its potential returns per unit of risk. Tiaa Cref Real Estate is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,784 in Tiaa Cref Real Estate on October 31, 2024 and sell it today you would earn a total of 37.00 from holding Tiaa Cref Real Estate or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Tiaa Cref Real Estate
Performance |
| Timeline |
| Western Asset Inflation |
| Tiaa Cref Real |
Western Asset and Tiaa-cref Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Tiaa-cref Real
The main advantage of trading using opposite Western Asset and Tiaa-cref Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Tiaa-cref Real 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 Real will offset losses from the drop in Tiaa-cref Real's long position.| Western Asset vs. Investec Global Franchise | Western Asset vs. Kinetics Global Fund | Western Asset vs. Morningstar Global Income | Western Asset vs. Aqr Global Macro |
| Tiaa-cref Real vs. Invesco Real Estate | Tiaa-cref Real vs. Short Real Estate | Tiaa-cref Real vs. Real Estate Ultrasector | Tiaa-cref Real vs. Jhancock Real Estate |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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