Correlation Between Tiaa-cref Large-cap and Aig Government

Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Large-cap and Aig Government 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 Large-cap and Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Tiaa-cref Large-cap and Aig Government 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 Large-cap with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and Aig Government.

Diversification Opportunities for Tiaa-cref Large-cap and Aig Government

0.53

Correlation Coefficient

Tiaa-cref Large-cap  Aig Government

Very weak diversification

The 3 months correlation between Tiaa-cref and Aig is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Growth and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Tiaa-cref Large-cap 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Aig Government go up and down completely randomly.

Pair Corralation between Tiaa-cref Large-cap and Aig Government

Assuming the 90 days horizon Tiaa Cref Large Cap Growth is expected to generate 5.22 times more return on investment than Aig Government. However, Tiaa-cref Large-cap is 5.22 times more volatile than Aig Government Money. It trades about 0.09 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.02 per unit of risk. If you would invest  6,609  in Tiaa Cref Large Cap Growth on October 25, 2024 and sell it today you would earn a total of  391.00  from holding Tiaa Cref Large Cap Growth or generate 5.92% return on investment over 90 days.

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

Tiaa Cref Large Cap Growth  vs.  Aig Government Money

Tiaa-cref Large-cap

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Large Cap Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa-cref Large-cap may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aig Government Money

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aig Government Money are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aig Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa-cref Large-cap and Aig Government

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

The idea behind Tiaa Cref Large Cap Growth and Aig Government Money 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.