Correlation Between Tiaa-cref Small/mid-cap and Largecap
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small/mid-cap and Largecap 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 Largecap 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 Largecap Sp 500, you can compare the effects of market volatilities on Tiaa-cref Small/mid-cap and Largecap 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 Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small/mid-cap and Largecap.
Diversification Opportunities for Tiaa-cref Small/mid-cap and Largecap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tiaa-cref and Largecap is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Smallmid Cap Equity and Largecap Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Largecap Sp 500 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 Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Largecap Sp 500 has no effect on the direction of Tiaa-cref Small/mid-cap i.e., Tiaa-cref Small/mid-cap and Largecap go up and down completely randomly.
Pair Corralation between Tiaa-cref Small/mid-cap and Largecap
Assuming the 90 days horizon Tiaa Cref Smallmid Cap Equity is expected to generate 1.68 times more return on investment than Largecap. However, Tiaa-cref Small/mid-cap is 1.68 times more volatile than Largecap Sp 500. It trades about 0.39 of its potential returns per unit of risk. Largecap Sp 500 is currently generating about 0.36 per unit of risk. If you would invest 1,611 in Tiaa Cref Smallmid Cap Equity on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Tiaa Cref Smallmid Cap Equity or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Smallmid Cap Equity vs. Largecap Sp 500
Performance |
| Timeline |
| Tiaa-cref Small/mid-cap |
| Largecap Sp 500 |
Tiaa-cref Small/mid-cap and Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Small/mid-cap and Largecap
The main advantage of trading using opposite Tiaa-cref Small/mid-cap and Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small/mid-cap position performs unexpectedly, Largecap 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 Largecap will offset losses from the drop in Largecap'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 |
| Largecap vs. Western Asset High | Largecap vs. Federated Institutional High | Largecap vs. Prudential Short Duration | Largecap vs. Msift High Yield |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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