Correlation Between Valic Company and Tiaa-cref Small-cap
Can any of the company-specific risk be diversified away by investing in both Valic Company and Tiaa-cref Small-cap 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 Valic Company and Tiaa-cref Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Tiaa Cref Small Cap Equity, you can compare the effects of market volatilities on Valic Company and Tiaa-cref Small-cap 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 Valic Company with a short position of Tiaa-cref Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Tiaa-cref Small-cap.
Diversification Opportunities for Valic Company and Tiaa-cref Small-cap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Tiaa-cref is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Tiaa Cref Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small-cap and Valic Company 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 Valic Company I are associated (or correlated) with Tiaa-cref Small-cap. 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 Small-cap has no effect on the direction of Valic Company i.e., Valic Company and Tiaa-cref Small-cap go up and down completely randomly.
Pair Corralation between Valic Company and Tiaa-cref Small-cap
Assuming the 90 days horizon Valic Company is expected to generate 1.23 times less return on investment than Tiaa-cref Small-cap. But when comparing it to its historical volatility, Valic Company I is 1.0 times less risky than Tiaa-cref Small-cap. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Small Cap Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,855 in Tiaa Cref Small Cap Equity on November 4, 2024 and sell it today you would earn a total of 34.00 from holding Tiaa Cref Small Cap Equity or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Tiaa Cref Small Cap Equity
Performance |
| Timeline |
| Valic Company I |
| Tiaa-cref Small-cap |
Valic Company and Tiaa-cref Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Tiaa-cref Small-cap
The main advantage of trading using opposite Valic Company and Tiaa-cref Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Tiaa-cref Small-cap 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 Small-cap will offset losses from the drop in Tiaa-cref Small-cap's long position.| Valic Company vs. Delaware Limited Term Diversified | Valic Company vs. Gmo Quality Fund | Valic Company vs. Lord Abbett Diversified | Valic Company vs. Davenport Small Cap |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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