Correlation Between Federated Emerging and Tiaa-cref Lifecycle
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Tiaa-cref Lifecycle 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 Federated Emerging and Tiaa-cref Lifecycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Emerging Market and Tiaa Cref Lifecycle Index, you can compare the effects of market volatilities on Federated Emerging and Tiaa-cref Lifecycle 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 Federated Emerging with a short position of Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Tiaa-cref Lifecycle.
Diversification Opportunities for Federated Emerging and Tiaa-cref Lifecycle
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Tiaa-cref is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Tiaa Cref Lifecycle Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle and Federated Emerging 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 Federated Emerging Market are associated (or correlated) with Tiaa-cref Lifecycle. 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 Lifecycle has no effect on the direction of Federated Emerging i.e., Federated Emerging and Tiaa-cref Lifecycle go up and down completely randomly.
Pair Corralation between Federated Emerging and Tiaa-cref Lifecycle
If you would invest 2,013 in Tiaa Cref Lifecycle Index on May 2, 2025 and sell it today you would earn a total of 14.00 from holding Tiaa Cref Lifecycle Index or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Federated Emerging Market vs. Tiaa Cref Lifecycle Index
Performance |
| Timeline |
| Federated Emerging Market |
Risk-Adjusted Performance
Very Strong
Weak | Strong |
| Tiaa Cref Lifecycle |
Federated Emerging and Tiaa-cref Lifecycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Tiaa-cref Lifecycle
The main advantage of trading using opposite Federated Emerging and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Tiaa-cref Lifecycle 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 Lifecycle will offset losses from the drop in Tiaa-cref Lifecycle's long position.| Federated Emerging vs. Ms Global Fixed | Federated Emerging vs. Us Vector Equity | Federated Emerging vs. Gmo Global Equity | Federated Emerging vs. T Rowe Price |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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