Correlation Between American Funds and Tiaa Cref
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2065 and Tiaa Cref Lifecycle Index, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Tiaa Cref.
Diversification Opportunities for American Funds and Tiaa Cref
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Tiaa is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2065 and Tiaa Cref Lifecycle Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle and American Funds 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 American Funds 2065 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 Lifecycle has no effect on the direction of American Funds i.e., American Funds and Tiaa Cref go up and down completely randomly.
Pair Corralation between American Funds and Tiaa Cref
Assuming the 90 days horizon American Funds is expected to generate 1.15 times less return on investment than Tiaa Cref. In addition to that, American Funds is 1.07 times more volatile than Tiaa Cref Lifecycle Index. It trades about 0.25 of its total potential returns per unit of risk. Tiaa Cref Lifecycle Index is currently generating about 0.31 per unit of volatility. If you would invest 1,434 in Tiaa Cref Lifecycle Index on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Tiaa Cref Lifecycle Index or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2065 vs. Tiaa Cref Lifecycle Index
Performance |
| Timeline |
| American Funds 2065 |
| Tiaa Cref Lifecycle |
American Funds and Tiaa Cref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Tiaa Cref
The main advantage of trading using opposite American Funds and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. The Gabelli Small | American Funds vs. Small Cap Stock | American Funds vs. Fidelity Advisor Diversified | American Funds vs. American Century Diversified |
| Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |