Correlation Between Tiaa-cref Small-cap and Texas Fund
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small-cap and Texas Fund 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-cap and Texas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Small Cap Equity and The Texas Fund, you can compare the effects of market volatilities on Tiaa-cref Small-cap and Texas Fund 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-cap with a short position of Texas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small-cap and Texas Fund.
Diversification Opportunities for Tiaa-cref Small-cap and Texas Fund
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tiaa-cref and Texas is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Equity and The Texas Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Fund and Tiaa-cref Small-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 Small Cap Equity are associated (or correlated) with Texas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Fund has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Texas Fund go up and down completely randomly.
Pair Corralation between Tiaa-cref Small-cap and Texas Fund
Assuming the 90 days horizon Tiaa Cref Small Cap Equity is expected to generate 0.9 times more return on investment than Texas Fund. However, Tiaa Cref Small Cap Equity is 1.11 times less risky than Texas Fund. It trades about 0.17 of its potential returns per unit of risk. The Texas Fund is currently generating about 0.13 per unit of risk. If you would invest 1,825 in Tiaa Cref Small Cap Equity on November 3, 2024 and sell it today you would earn a total of 64.00 from holding Tiaa Cref Small Cap Equity or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Small Cap Equity vs. The Texas Fund
Performance |
| Timeline |
| Tiaa-cref Small-cap |
| Texas Fund |
Tiaa-cref Small-cap and Texas Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Small-cap and Texas Fund
The main advantage of trading using opposite Tiaa-cref Small-cap and Texas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small-cap position performs unexpectedly, Texas Fund 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 Texas Fund will offset losses from the drop in Texas Fund's long position.| Tiaa-cref Small-cap vs. Vanguard Growth And | Tiaa-cref Small-cap vs. Transamerica Capital Growth | Tiaa-cref Small-cap vs. Mid Cap Growth | Tiaa-cref Small-cap vs. Stringer Growth Fund |
| Texas Fund vs. Voya Solution Conservative | Texas Fund vs. Federated Hermes Conservative | Texas Fund vs. Diversified Income Fund | Texas Fund vs. American Funds Conservative |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |