Correlation Between Tiaa Cref and American Growth
Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and American Growth 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 Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Equity Index and American Growth Fund, you can compare the effects of market volatilities on Tiaa Cref and American Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and American Growth.
Diversification Opportunities for Tiaa Cref and American Growth
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tiaa and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Equity Index and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth 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 Equity Index are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and American Growth go up and down completely randomly.
Pair Corralation between Tiaa Cref and American Growth
Assuming the 90 days horizon Tiaa Cref Equity Index is expected to generate 1.09 times more return on investment than American Growth. However, Tiaa Cref is 1.09 times more volatile than American Growth Fund. It trades about 0.03 of its potential returns per unit of risk. American Growth Fund is currently generating about -0.11 per unit of risk. If you would invest 4,310 in Tiaa Cref Equity Index on November 10, 2024 and sell it today you would earn a total of 34.00 from holding Tiaa Cref Equity Index or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Equity Index vs. American Growth Fund
Performance |
| Timeline |
| Tiaa Cref Equity |
| American Growth |
Tiaa Cref and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa Cref and American Growth
The main advantage of trading using opposite Tiaa Cref and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa Cref position performs unexpectedly, American Growth 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 Growth will offset losses from the drop in American Growth's long position.The idea behind Tiaa Cref Equity Index and American Growth Fund 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.| American Growth vs. Americafirst Large Cap | American Growth vs. Qs Large Cap | American Growth vs. Calvert Large Cap | American Growth vs. Qs Large 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 Stocks Directory module to find actively traded stocks across global markets.
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