Correlation Between State Farm and Tiaa-cref Lifestyle
Can any of the company-specific risk be diversified away by investing in both State Farm and Tiaa-cref Lifestyle 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 State Farm and Tiaa-cref Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Farm Balanced and Tiaa Cref Lifestyle Conservative, you can compare the effects of market volatilities on State Farm and Tiaa-cref Lifestyle 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 State Farm with a short position of Tiaa-cref Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Farm and Tiaa-cref Lifestyle.
Diversification Opportunities for State Farm and Tiaa-cref Lifestyle
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Tiaa-cref is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding State Farm Balanced and Tiaa Cref Lifestyle Conservati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle and State Farm 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 State Farm Balanced are associated (or correlated) with Tiaa-cref Lifestyle. 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 Lifestyle has no effect on the direction of State Farm i.e., State Farm and Tiaa-cref Lifestyle go up and down completely randomly.
Pair Corralation between State Farm and Tiaa-cref Lifestyle
Assuming the 90 days horizon State Farm Balanced is expected to generate 1.34 times more return on investment than Tiaa-cref Lifestyle. However, State Farm is 1.34 times more volatile than Tiaa Cref Lifestyle Conservative. It trades about 0.14 of its potential returns per unit of risk. Tiaa Cref Lifestyle Conservative is currently generating about 0.11 per unit of risk. If you would invest 7,522 in State Farm Balanced on August 30, 2024 and sell it today you would earn a total of 2,299 from holding State Farm Balanced or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Farm Balanced vs. Tiaa Cref Lifestyle Conservati
Performance |
| Timeline |
| State Farm Balanced |
| Tiaa Cref Lifestyle |
State Farm and Tiaa-cref Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Farm and Tiaa-cref Lifestyle
The main advantage of trading using opposite State Farm and Tiaa-cref Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Farm position performs unexpectedly, Tiaa-cref Lifestyle 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 Lifestyle will offset losses from the drop in Tiaa-cref Lifestyle's long position.| State Farm vs. John Hancock Money | State Farm vs. T Rowe Price | State Farm vs. Rbc Bluebay Global | State Farm vs. Multisector Bond Sma |
| Tiaa-cref Lifestyle vs. Vanguard Emerging Markets | Tiaa-cref Lifestyle vs. Rbc Emerging Markets | Tiaa-cref Lifestyle vs. T Rowe Price | Tiaa-cref Lifestyle vs. Dodge Cox Emerging |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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