Correlation Between Nasdaq 100 and Tiaa-cref Lifecycle
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Tiaa-cref Lifecycle 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 Nasdaq 100 and Tiaa-cref Lifecycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Tiaa Cref Lifecycle 2050, you can compare the effects of market volatilities on Nasdaq 100 and Tiaa-cref Lifecycle 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 Nasdaq 100 with a short position of Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Tiaa-cref Lifecycle.
Diversification Opportunities for Nasdaq 100 and Tiaa-cref Lifecycle
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Tiaa-cref is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Tiaa Cref Lifecycle 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Tiaa-cref Lifecycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifecycle has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Tiaa-cref Lifecycle go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Tiaa-cref Lifecycle
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.79 times more return on investment than Tiaa-cref Lifecycle. However, Nasdaq 100 is 1.79 times more volatile than Tiaa Cref Lifecycle 2050. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Lifecycle 2050 is currently generating about 0.04 per unit of risk. If you would invest 5,040 in Nasdaq 100 Index Fund on August 30, 2024 and sell it today you would earn a total of 175.00 from holding Nasdaq 100 Index Fund or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Tiaa Cref Lifecycle 2050
Performance |
| Timeline |
| Nasdaq 100 Index |
| Tiaa Cref Lifecycle |
Nasdaq 100 and Tiaa-cref Lifecycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Tiaa-cref Lifecycle
The main advantage of trading using opposite Nasdaq 100 and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle will offset losses from the drop in Tiaa-cref Lifecycle's long position.| Nasdaq 100 vs. Capital Growth Fund | Nasdaq 100 vs. Emerging Markets Fund | Nasdaq 100 vs. High Income Fund | Nasdaq 100 vs. International Fund International |
| Tiaa-cref Lifecycle vs. Nasdaq 100 Index Fund | Tiaa-cref Lifecycle vs. Issachar Fund Class | Tiaa-cref Lifecycle vs. Rbb Fund | Tiaa-cref Lifecycle vs. Small Cap 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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