Correlation Between Saat E and Tiaa Cref

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

By analyzing existing cross correlation between Saat E Market and Tiaa Cref Lifestyle Aggressive, you can compare the effects of market volatilities on Saat E 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 Saat E with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat E and Tiaa Cref.

Diversification Opportunities for Saat E and Tiaa Cref

0.78

Correlation Coefficient

Saat E  Tiaa Cref

Poor diversification

The 3 months correlation between Saat and Tiaa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Saat E Market and Tiaa Cref Lifestyle Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle and Saat E 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 Saat E Market 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 Lifestyle has no effect on the direction of Saat E i.e., Saat E and Tiaa Cref go up and down completely randomly.

Pair Corralation between Saat E and Tiaa Cref

Assuming the 90 days horizon Saat E Market is expected to under-perform the Tiaa Cref. In addition to that, Saat E is 2.14 times more volatile than Tiaa Cref Lifestyle Aggressive. It trades about -0.07 of its total potential returns per unit of risk. Tiaa Cref Lifestyle Aggressive is currently generating about 0.03 per unit of volatility. If you would invest  2,029  in Tiaa Cref Lifestyle Aggressive on October 24, 2024 and sell it today you would earn a total of  23.00  from holding Tiaa Cref Lifestyle Aggressive or generate 1.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Saat E Market  vs.  Tiaa Cref Lifestyle Aggressive

Saat E Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saat E Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tiaa Cref Lifestyle

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifestyle Aggressive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward 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 Saat E and Tiaa Cref

The main advantage of trading using opposite Saat E and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat E 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 Saat E Market and Tiaa Cref Lifestyle Aggressive 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.