Correlation Between Snap and Tiaa-cref Lifecycle
Can any of the company-specific risk be diversified away by investing in both Snap and Tiaa-cref Lifecycle 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 Snap and Tiaa-cref Lifecycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Tiaa Cref Lifecycle Index, you can compare the effects of market volatilities on Snap and Tiaa-cref Lifecycle 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 Snap with a short position of Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Tiaa-cref Lifecycle.
Diversification Opportunities for Snap and Tiaa-cref Lifecycle
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Tiaa-cref is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc 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 Snap 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 Snap Inc are associated (or correlated) with Tiaa-cref Lifecycle. 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 Snap i.e., Snap and Tiaa-cref Lifecycle go up and down completely randomly.
Pair Corralation between Snap and Tiaa-cref Lifecycle
Given the investment horizon of 90 days Snap Inc is expected to generate 12.52 times more return on investment than Tiaa-cref Lifecycle. However, Snap is 12.52 times more volatile than Tiaa Cref Lifecycle Index. It trades about 0.06 of its potential returns per unit of risk. Tiaa Cref Lifecycle Index is currently generating about -0.06 per unit of risk. If you would invest 1,059 in Snap Inc on August 26, 2024 and sell it today you would earn a total of 83.00 from holding Snap Inc or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Tiaa Cref Lifecycle Index
Performance |
| Timeline |
| Snap Inc |
| Tiaa Cref Lifecycle |
Snap and Tiaa-cref Lifecycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Tiaa-cref Lifecycle
The main advantage of trading using opposite Snap and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Tiaa-cref Lifecycle 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 Lifecycle will offset losses from the drop in Tiaa-cref Lifecycle's long position.The idea behind Snap Inc and Tiaa Cref Lifecycle Index 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.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.
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