Correlation Between Tiaa Cref and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and Amcap Fund 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 Amcap Fund 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 Growth and Amcap Fund Class, you can compare the effects of market volatilities on Tiaa Cref and Amcap Fund 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Amcap Fund.
Diversification Opportunities for Tiaa Cref and Amcap Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tiaa and Amcap is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Growth and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Large Cap Growth are associated (or correlated) with Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Amcap Fund go up and down completely randomly.
Pair Corralation between Tiaa Cref and Amcap Fund
Assuming the 90 days horizon Tiaa Cref Large Cap Growth is expected to under-perform the Amcap Fund. In addition to that, Tiaa Cref is 1.09 times more volatile than Amcap Fund Class. It trades about -0.17 of its total potential returns per unit of risk. Amcap Fund Class is currently generating about -0.18 per unit of volatility. If you would invest 3,959 in Amcap Fund Class on January 26, 2024 and sell it today you would lose (141.00) from holding Amcap Fund Class or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Large Cap Growth vs. Amcap Fund Class
Performance |
| Timeline |
| Tiaa Cref Large |
| Amcap Fund Class |
Tiaa Cref and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa Cref and Amcap Fund
The main advantage of trading using opposite Tiaa Cref and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa Cref position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Tiaa Cref vs. Amana Income Fund | Tiaa Cref vs. Amana Income Fund | Tiaa Cref vs. Amana Developing World | Tiaa Cref vs. Amana Developing World |
| Amcap Fund vs. Amana Income Fund | Amcap Fund vs. Amana Income Fund | Amcap Fund vs. Amana Developing World | Amcap Fund vs. Amana Developing World |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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