Correlation Between Tiaa Cref and Aggressive Allocation
Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and Aggressive Allocation 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 Aggressive Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Smallmid Cap Equity and Aggressive Allocation Fund, you can compare the effects of market volatilities on Tiaa Cref and Aggressive Allocation 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 Aggressive Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Aggressive Allocation.
Diversification Opportunities for Tiaa Cref and Aggressive Allocation
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tiaa and Aggressive is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Smallmid Cap Equity and Aggressive Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Allocation 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 Smallmid Cap Equity are associated (or correlated) with Aggressive Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Allocation has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Aggressive Allocation go up and down completely randomly.
Pair Corralation between Tiaa Cref and Aggressive Allocation
Assuming the 90 days horizon Tiaa Cref Smallmid Cap Equity is expected to generate 1.33 times more return on investment than Aggressive Allocation. However, Tiaa Cref is 1.33 times more volatile than Aggressive Allocation Fund. It trades about 0.21 of its potential returns per unit of risk. Aggressive Allocation Fund is currently generating about 0.03 per unit of risk. If you would invest 1,493 in Tiaa Cref Smallmid Cap Equity on October 22, 2024 and sell it today you would earn a total of 54.00 from holding Tiaa Cref Smallmid Cap Equity or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Smallmid Cap Equity vs. Aggressive Allocation Fund
Performance |
| Timeline |
| Tiaa Cref Smallmid |
| Aggressive Allocation |
Tiaa Cref and Aggressive Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa Cref and Aggressive Allocation
The main advantage of trading using opposite Tiaa Cref and Aggressive Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa Cref position performs unexpectedly, Aggressive Allocation 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 Aggressive Allocation will offset losses from the drop in Aggressive Allocation's long position.| Tiaa Cref vs. Icon Financial Fund | Tiaa Cref vs. Putnam Global Financials | Tiaa Cref vs. T Rowe Price | Tiaa Cref vs. Gabelli Global Financial |
| Aggressive Allocation vs. Dunham High Yield | Aggressive Allocation vs. Artisan High Income | Aggressive Allocation vs. Ab High Income | Aggressive Allocation vs. Needham Aggressive Growth |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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