Correlation Between Simt High and Tiaa-cref Small-cap
Can any of the company-specific risk be diversified away by investing in both Simt High and Tiaa-cref Small-cap 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 Simt High and Tiaa-cref Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Tiaa Cref Small Cap Equity, you can compare the effects of market volatilities on Simt High and Tiaa-cref Small-cap 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 Simt High with a short position of Tiaa-cref Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Tiaa-cref Small-cap.
Diversification Opportunities for Simt High and Tiaa-cref Small-cap
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simt and Tiaa-cref is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and Tiaa Cref Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small-cap and Simt High 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 Simt High Yield are associated (or correlated) with Tiaa-cref Small-cap. 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 Small-cap has no effect on the direction of Simt High i.e., Simt High and Tiaa-cref Small-cap go up and down completely randomly.
Pair Corralation between Simt High and Tiaa-cref Small-cap
Assuming the 90 days horizon Simt High is expected to generate 2.18 times less return on investment than Tiaa-cref Small-cap. But when comparing it to its historical volatility, Simt High Yield is 3.85 times less risky than Tiaa-cref Small-cap. It trades about 0.27 of its potential returns per unit of risk. Tiaa Cref Small Cap Equity is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,746 in Tiaa Cref Small Cap Equity on October 25, 2024 and sell it today you would earn a total of 51.00 from holding Tiaa Cref Small Cap Equity or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Tiaa Cref Small Cap Equity
Performance |
| Timeline |
| Simt High Yield |
| Tiaa-cref Small-cap |
Simt High and Tiaa-cref Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Tiaa-cref Small-cap
The main advantage of trading using opposite Simt High and Tiaa-cref Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, Tiaa-cref Small-cap 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 Small-cap will offset losses from the drop in Tiaa-cref Small-cap's long position.| Simt High vs. Lord Abbett Diversified | Simt High vs. Alphacentric Hedged Market | Simt High vs. Locorr Market Trend | Simt High vs. Artisan Developing World |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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