Correlation Between Tiaa-cref Equity and American Funds
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Equity 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 Equity 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 Equity Index and American Funds Income, you can compare the effects of market volatilities on Tiaa-cref Equity 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 Equity with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Equity and American Funds.
Diversification Opportunities for Tiaa-cref Equity and American Funds
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tiaa-cref and American is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Equity Index and American Funds Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Income and Tiaa-cref Equity 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 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 Income has no effect on the direction of Tiaa-cref Equity i.e., Tiaa-cref Equity and American Funds go up and down completely randomly.
Pair Corralation between Tiaa-cref Equity and American Funds
Assuming the 90 days horizon Tiaa Cref Equity Index is expected to generate 2.52 times more return on investment than American Funds. However, Tiaa-cref Equity is 2.52 times more volatile than American Funds Income. It trades about 0.39 of its potential returns per unit of risk. American Funds Income is currently generating about 0.3 per unit of risk. If you would invest 4,109 in Tiaa Cref Equity Index on September 3, 2024 and sell it today you would earn a total of 264.00 from holding Tiaa Cref Equity Index or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Equity Index vs. American Funds Income
Performance |
| Timeline |
| Tiaa Cref Equity |
| American Funds Income |
Tiaa-cref Equity and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Equity and American Funds
The main advantage of trading using opposite Tiaa-cref Equity and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Equity 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 Equity vs. Vanguard Total Stock | Tiaa-cref Equity vs. Vanguard 500 Index | Tiaa-cref Equity vs. Vanguard Total Stock | Tiaa-cref Equity vs. Vanguard Total Stock |
| American Funds vs. Ms Global Fixed | American Funds vs. Scharf Fund Retail | American Funds vs. Us Vector Equity | American Funds vs. Ultra Short Fixed Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |