Correlation Between Americafirst Large and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both Americafirst Large and Tiaa Cref 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 Americafirst Large and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Americafirst Large Cap and Tiaa Cref Mid Cap Value, you can compare the effects of market volatilities on Americafirst Large and Tiaa Cref 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 Americafirst Large with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Tiaa Cref.

Diversification Opportunities for Americafirst Large and Tiaa Cref

0.83

Correlation Coefficient

Americafirst Large  Tiaa Cref

Very poor diversification

The 3 months correlation between Americafirst and Tiaa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap and Tiaa Cref Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Mid and Americafirst Large 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 Americafirst Large Cap are associated (or correlated) with Tiaa Cref. 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 Mid has no effect on the direction of Americafirst Large i.e., Americafirst Large and Tiaa Cref go up and down completely randomly.

Pair Corralation between Americafirst Large and Tiaa Cref

Assuming the 90 days horizon Americafirst Large Cap is expected to generate 0.74 times more return on investment than Tiaa Cref. However, Americafirst Large Cap is 1.35 times less risky than Tiaa Cref. It trades about 0.17 of its potential returns per unit of risk. Tiaa Cref Mid Cap Value is currently generating about 0.0 per unit of risk. If you would invest  1,308  in Americafirst Large Cap on September 15, 2024 and sell it today you would earn a total of  124.00  from holding Americafirst Large Cap or generate 9.48% return on investment over 90 days.

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

Americafirst Large Cap  vs.  Tiaa Cref Mid Cap Value

Americafirst Large Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tiaa Cref Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Mid Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Americafirst Large and Tiaa Cref

The main advantage of trading using opposite Americafirst Large and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst Large position performs unexpectedly, Tiaa Cref 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 will offset losses from the drop in Tiaa Cref's long position.

The idea behind Americafirst Large Cap and Tiaa Cref Mid Cap Value 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.