Correlation Between Moderately Aggressive and Tiaa-cref Lifecycle

Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive 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 Moderately Aggressive Balanced and Tiaa Cref Lifecycle Retirement, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Tiaa-cref Lifecycle.

Diversification Opportunities for Moderately Aggressive and Tiaa-cref Lifecycle

0.99

Correlation Coefficient

Moderately Aggressive  Tiaa-cref Lifecycle

No risk reduction

The 3 months correlation between Moderately and Tiaa-cref is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced and Tiaa Cref Lifecycle Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle and Moderately Aggressive 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Tiaa-cref Lifecycle go up and down completely randomly.

Pair Corralation between Moderately Aggressive and Tiaa-cref Lifecycle

Assuming the 90 days horizon Moderately Aggressive Balanced is expected to generate 1.54 times more return on investment than Tiaa-cref Lifecycle. However, Moderately Aggressive is 1.54 times more volatile than Tiaa Cref Lifecycle Retirement. It trades about 0.34 of its potential returns per unit of risk. Tiaa Cref Lifecycle Retirement is currently generating about 0.36 per unit of risk. If you would invest  1,207  in Moderately Aggressive Balanced on April 28, 2025 and sell it today you would earn a total of  67.00  from holding Moderately Aggressive Balanced or generate 5.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Moderately Aggressive Balanced  vs.  Tiaa Cref Lifecycle Retirement

Moderately Aggressive

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderately Aggressive Balanced are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Moderately Aggressive may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Tiaa Cref Lifecycle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifecycle Retirement are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Tiaa-cref Lifecycle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moderately Aggressive and Tiaa-cref Lifecycle

The main advantage of trading using opposite Moderately Aggressive and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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.

The idea behind Moderately Aggressive Balanced and Tiaa Cref Lifecycle Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.