Correlation Between Tiaa-cref Lifecycle and Jpmorgan Smartretirement

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

By analyzing existing cross correlation between Tiaa Cref Lifecycle 2040 and Jpmorgan Smartretirement 2040, you can compare the effects of market volatilities on Tiaa-cref Lifecycle and Jpmorgan Smartretirement 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 Lifecycle with a short position of Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Lifecycle and Jpmorgan Smartretirement.

Diversification Opportunities for Tiaa-cref Lifecycle and Jpmorgan Smartretirement

1.0

Correlation Coefficient

Tiaa-cref Lifecycle  Jpmorgan Smartretirement

No risk reduction

The 3 months correlation between Tiaa-cref and Jpmorgan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Lifecycle 2040 and Jpmorgan Smartretirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement and Tiaa-cref Lifecycle 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 Lifecycle 2040 are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Tiaa-cref Lifecycle i.e., Tiaa-cref Lifecycle and Jpmorgan Smartretirement go up and down completely randomly.

Pair Corralation between Tiaa-cref Lifecycle and Jpmorgan Smartretirement

Assuming the 90 days horizon Tiaa Cref Lifecycle 2040 is expected to under-perform the Jpmorgan Smartretirement. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Lifecycle 2040 is 1.06 times less risky than Jpmorgan Smartretirement. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Jpmorgan Smartretirement 2040 is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,130  in Jpmorgan Smartretirement 2040 on February 3, 2024 and sell it today you would lose (20.00) from holding Jpmorgan Smartretirement 2040 or give up 0.94% 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 Lifecycle 2040  vs.  Jpmorgan Smartretirement 2040

Tiaa Cref Lifecycle

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifecycle 2040 are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Tiaa-cref Lifecycle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan Smartretirement

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Smartretirement 2040 are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jpmorgan Smartretirement 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 Lifecycle and Jpmorgan Smartretirement

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

The idea behind Tiaa Cref Lifecycle 2040 and Jpmorgan Smartretirement 2040 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..