Correlation Between Simt Multi-asset and Tiaa-cref Inflation-linked
Can any of the company-specific risk be diversified away by investing in both Simt Multi-asset and Tiaa-cref Inflation-linked 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 Multi-asset and Tiaa-cref Inflation-linked into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Multi Asset Inflation and Tiaa Cref Inflation Linked Bond, you can compare the effects of market volatilities on Simt Multi-asset and Tiaa-cref Inflation-linked 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 Multi-asset with a short position of Tiaa-cref Inflation-linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi-asset and Tiaa-cref Inflation-linked.
Diversification Opportunities for Simt Multi-asset and Tiaa-cref Inflation-linked
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Tiaa-cref is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Tiaa Cref Inflation Linked Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Inflation-linked and Simt Multi-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 Simt Multi Asset Inflation are associated (or correlated) with Tiaa-cref Inflation-linked. 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 Inflation-linked has no effect on the direction of Simt Multi-asset i.e., Simt Multi-asset and Tiaa-cref Inflation-linked go up and down completely randomly.
Pair Corralation between Simt Multi-asset and Tiaa-cref Inflation-linked
Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 1.3 times more return on investment than Tiaa-cref Inflation-linked. However, Simt Multi-asset is 1.3 times more volatile than Tiaa Cref Inflation Linked Bond. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Inflation Linked Bond is currently generating about 0.08 per unit of risk. If you would invest 797.00 in Simt Multi Asset Inflation on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Simt Multi Asset Inflation or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Multi Asset Inflation vs. Tiaa Cref Inflation Linked Bon
Performance |
| Timeline |
| Simt Multi Asset |
| Tiaa-cref Inflation-linked |
Simt Multi-asset and Tiaa-cref Inflation-linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Multi-asset and Tiaa-cref Inflation-linked
The main advantage of trading using opposite Simt Multi-asset and Tiaa-cref Inflation-linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Multi-asset position performs unexpectedly, Tiaa-cref Inflation-linked 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 Inflation-linked will offset losses from the drop in Tiaa-cref Inflation-linked's long position.| Simt Multi-asset vs. Simt Multi Asset Accumulation | Simt Multi-asset vs. Saat Market Growth | Simt Multi-asset vs. Simt Real Return | Simt Multi-asset vs. Simt Small Cap |
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.
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