Correlation Between Tiaa-cref Large-cap and American Beacon
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Large-cap and American Beacon 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 American Beacon 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 Value and American Beacon Large, you can compare the effects of market volatilities on Tiaa-cref Large-cap and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Large-cap and American Beacon.
Diversification Opportunities for Tiaa-cref Large-cap and American Beacon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Tiaa-cref and American is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and American Beacon Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Large 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 Value are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Large has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and American Beacon go up and down completely randomly.
Pair Corralation between Tiaa-cref Large-cap and American Beacon
Assuming the 90 days horizon Tiaa Cref Large Cap Value is expected to generate 0.94 times more return on investment than American Beacon. However, Tiaa Cref Large Cap Value is 1.06 times less risky than American Beacon. It trades about -0.07 of its potential returns per unit of risk. American Beacon Large is currently generating about -0.07 per unit of risk. If you would invest 2,157 in Tiaa Cref Large Cap Value on January 25, 2024 and sell it today you would lose (23.00) from holding Tiaa Cref Large Cap Value or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Large Cap Value vs. American Beacon Large
Performance |
| Timeline |
| Tiaa-cref Large-cap |
| American Beacon Large |
Tiaa-cref Large-cap and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Large-cap and American Beacon
The main advantage of trading using opposite Tiaa-cref Large-cap and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Large-cap position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Tiaa-cref Large-cap vs. Loomis Sayles Growth | Tiaa-cref Large-cap vs. Diamond Hill Large | Tiaa-cref Large-cap vs. Champlain Small Pany | Tiaa-cref Large-cap vs. HUMANA INC |
| American Beacon vs. Edgewood Growth Fund | American Beacon vs. Hartford Schroders Emerging | American Beacon vs. HUMANA INC | American Beacon vs. Aquagold International |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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