Correlation Between Tiaa-cref Small/mid-cap and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small/mid-cap and Lord Abbett 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 Small/mid-cap and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Smallmid Cap Equity and Lord Abbett Diversified, you can compare the effects of market volatilities on Tiaa-cref Small/mid-cap and Lord Abbett 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 Small/mid-cap with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small/mid-cap and Lord Abbett.
Diversification Opportunities for Tiaa-cref Small/mid-cap and Lord Abbett
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tiaa-cref and Lord is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Smallmid Cap Equity and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Tiaa-cref Small/mid-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 Smallmid Cap Equity are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Diversified has no effect on the direction of Tiaa-cref Small/mid-cap i.e., Tiaa-cref Small/mid-cap and Lord Abbett go up and down completely randomly.
Pair Corralation between Tiaa-cref Small/mid-cap and Lord Abbett
Assuming the 90 days horizon Tiaa Cref Smallmid Cap Equity is expected to generate 3.45 times more return on investment than Lord Abbett. However, Tiaa-cref Small/mid-cap is 3.45 times more volatile than Lord Abbett Diversified. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.18 per unit of risk. If you would invest 1,495 in Tiaa Cref Smallmid Cap Equity on September 1, 2024 and sell it today you would earn a total of 290.00 from holding Tiaa Cref Smallmid Cap Equity or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tiaa Cref Smallmid Cap Equity vs. Lord Abbett Diversified
Performance |
| Timeline |
| Tiaa-cref Small/mid-cap |
| Lord Abbett Diversified |
Tiaa-cref Small/mid-cap and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Small/mid-cap and Lord Abbett
The main advantage of trading using opposite Tiaa-cref Small/mid-cap and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small/mid-cap position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Tiaa-cref Small/mid-cap vs. Franklin Gold Precious | Tiaa-cref Small/mid-cap vs. Gamco Global Gold | Tiaa-cref Small/mid-cap vs. Short Precious Metals | Tiaa-cref Small/mid-cap vs. Invesco Gold Special |
| Lord Abbett vs. Transamerica Cleartrack Retirement | Lord Abbett vs. Blackrock Moderate Prepared | Lord Abbett vs. Wisdomtree Siegel Moderate | Lord Abbett vs. Target Retirement 2040 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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