Correlation Between Transamerica Intermediate and Sp 500
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate and Sp 500 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 Transamerica Intermediate and Sp 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and Sp 500 Index, you can compare the effects of market volatilities on Transamerica Intermediate and Sp 500 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 Transamerica Intermediate with a short position of Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Sp 500.
Diversification Opportunities for Transamerica Intermediate and Sp 500
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transamerica and SPXKX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and Sp 500 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 Index and Transamerica Intermediate 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 Transamerica Intermediate Muni are associated (or correlated) with Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Index has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and Sp 500 go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and Sp 500
Assuming the 90 days horizon Transamerica Intermediate Muni is expected to generate 0.05 times more return on investment than Sp 500. However, Transamerica Intermediate Muni is 18.99 times less risky than Sp 500. It trades about 0.49 of its potential returns per unit of risk. Sp 500 Index is currently generating about -0.18 per unit of risk. If you would invest 1,076 in Transamerica Intermediate Muni on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Transamerica Intermediate Muni or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. Sp 500 Index
Performance |
| Timeline |
| Transamerica Intermediate |
| Sp 500 Index |
Transamerica Intermediate and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and Sp 500
The main advantage of trading using opposite Transamerica Intermediate and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate position performs unexpectedly, Sp 500 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 Sp 500 will offset losses from the drop in Sp 500's long position.| Transamerica Intermediate vs. Champlain Mid Cap | Transamerica Intermediate vs. Praxis Growth Index | Transamerica Intermediate vs. Artisan Small Cap | Transamerica Intermediate vs. Chase Growth Fund |
| Sp 500 vs. Old Westbury Municipal | Sp 500 vs. T Rowe Price | Sp 500 vs. Blrc Sgy Mnp | Sp 500 vs. T Rowe Price |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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