Correlation Between Tiaa Cref and American Funds
Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and American Funds 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 Tiaa Cref and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Inflation Linked Bond and American Funds New, you can compare the effects of market volatilities on Tiaa Cref and American Funds 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 Tiaa Cref with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and American Funds.
Diversification Opportunities for Tiaa Cref and American Funds
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tiaa and American is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Inflation Linked Bon and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New and Tiaa Cref 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 Tiaa Cref Inflation Linked Bond are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and American Funds go up and down completely randomly.
Pair Corralation between Tiaa Cref and American Funds
Assuming the 90 days horizon Tiaa Cref Inflation Linked Bond is expected to under-perform the American Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Inflation Linked Bond is 3.01 times less risky than American Funds. The mutual fund trades about -0.02 of its potential returns per unit of risk. The American Funds New is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,667 in American Funds New on September 12, 2024 and sell it today you would earn a total of 84.00 from holding American Funds New or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Inflation Linked Bon vs. American Funds New
Performance |
| Timeline |
| Tiaa Cref Inflation |
| American Funds New |
Tiaa Cref and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa Cref and American Funds
The main advantage of trading using opposite Tiaa Cref and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa Cref position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Tiaa Cref vs. Metropolitan West High | Tiaa Cref vs. Franklin High Income | Tiaa Cref vs. Ppm High Yield | Tiaa Cref vs. Us High Relative |
| American Funds vs. American Funds New | American Funds vs. New Perspective Fund | American Funds vs. New Perspective Fund | American Funds vs. New Perspective Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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