Correlation Between Oakmark International and Tiaa Cref

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

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

Diversification Opportunities for Oakmark International and Tiaa Cref

0.85

Correlation Coefficient

Oakmark International  Tiaa Cref

Very poor diversification

The 3 months correlation between Oakmark and Tiaa is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Small and Tiaa Cref Intl Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Intl and Oakmark International 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 Oakmark International Small 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 Intl has no effect on the direction of Oakmark International i.e., Oakmark International and Tiaa Cref go up and down completely randomly.

Pair Corralation between Oakmark International and Tiaa Cref

Assuming the 90 days horizon Oakmark International Small is expected to under-perform the Tiaa Cref. In addition to that, Oakmark International is 1.12 times more volatile than Tiaa Cref Intl Small Cap. It trades about -0.01 of its total potential returns per unit of risk. Tiaa Cref Intl Small Cap is currently generating about 0.08 per unit of volatility. If you would invest  997.00  in Tiaa Cref Intl Small Cap on January 19, 2024 and sell it today you would earn a total of  46.00  from holding Tiaa Cref Intl Small Cap or generate 4.61% return on investment over 90 days.

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

Oakmark International Small  vs.  Tiaa Cref Intl Small Cap

Oakmark International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Oakmark International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Intl

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Intl Small Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oakmark International and Tiaa Cref

The main advantage of trading using opposite Oakmark International and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International 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.

The idea behind Oakmark International Small and Tiaa Cref Intl Small Cap 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.