Correlation Between Saat Aggressive and Tiaa-cref Lifestyle

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

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

Diversification Opportunities for Saat Aggressive and Tiaa-cref Lifestyle

0.89

Correlation Coefficient

Saat Aggressive  Tiaa-cref Lifestyle

Very poor diversification

The 3 months correlation between Saat and Tiaa-cref is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy 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 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 Saat Aggressive Strategy are associated (or correlated) with Tiaa-cref Lifestyle. 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 Aggressive i.e., Saat Aggressive and Tiaa-cref Lifestyle go up and down completely randomly.

Pair Corralation between Saat Aggressive and Tiaa-cref Lifestyle

Assuming the 90 days horizon Saat Aggressive Strategy is expected to generate 0.79 times more return on investment than Tiaa-cref Lifestyle. However, Saat Aggressive Strategy is 1.27 times less risky than Tiaa-cref Lifestyle. It trades about -0.04 of its potential returns per unit of risk. Tiaa Cref Lifestyle Aggressive is currently generating about -0.07 per unit of risk. If you would invest  1,488  in Saat Aggressive Strategy on October 9, 2024 and sell it today you would lose (21.00) from holding Saat Aggressive Strategy or give up 1.41% of portfolio value over 90 days.

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

Saat Aggressive Strategy  vs.  Tiaa Cref Lifestyle Aggressive

Saat Aggressive Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tiaa Cref Lifestyle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Lifestyle Aggressive has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Tiaa-cref Lifestyle 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 Aggressive and Tiaa-cref Lifestyle

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

The idea behind Saat Aggressive Strategy 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.