Correlation Between Tiaa-cref Large-cap and Stock Index
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Large-cap and Stock Index 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 Large-cap and Stock Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Large Cap Value and Stock Index Fund, you can compare the effects of market volatilities on Tiaa-cref Large-cap and Stock Index 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 Large-cap with a short position of Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and Stock Index.
Diversification Opportunities for Tiaa-cref Large-cap and Stock Index
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tiaa-cref and Stock is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund and Tiaa-cref Large-cap 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 Large Cap Value are associated (or correlated) with Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Stock Index go up and down completely randomly.
Pair Corralation between Tiaa-cref Large-cap and Stock Index
Assuming the 90 days horizon Tiaa Cref Large Cap Value is expected to generate 1.05 times more return on investment than Stock Index. However, Tiaa-cref Large-cap is 1.05 times more volatile than Stock Index Fund. It trades about 0.36 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.37 per unit of risk. If you would invest 2,304 in Tiaa Cref Large Cap Value on September 3, 2024 and sell it today you would earn a total of 133.00 from holding Tiaa Cref Large Cap Value or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Large Cap Value vs. Stock Index Fund
Performance |
| Timeline |
| Tiaa-cref Large-cap |
| Stock Index Fund |
Tiaa-cref Large-cap and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Large-cap and Stock Index
The main advantage of trading using opposite Tiaa-cref Large-cap and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Large-cap position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index's long position.| Tiaa-cref Large-cap vs. Tiaa Cref Mid Cap Value | Tiaa-cref Large-cap vs. Tiaa Cref International Equity | Tiaa-cref Large-cap vs. Tiaa Cref Mid Cap Growth | Tiaa-cref Large-cap vs. Tiaa Cref Small Cap Equity |
| Stock Index vs. Vanguard Total Stock | Stock Index vs. Vanguard 500 Index | Stock Index vs. Vanguard Total Stock | Stock Index vs. Vanguard Total Stock |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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