Correlation Between Siit Small and Tiaa Cref

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

By analyzing existing cross correlation between Siit Small Mid and Tiaa Cref Growth Income, you can compare the effects of market volatilities on Siit Small and Tiaa Cref 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 Siit Small with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Tiaa Cref.

Diversification Opportunities for Siit Small and Tiaa Cref

0.73

Correlation Coefficient

Siit Small  Tiaa Cref

Poor diversification

The 3 months correlation between Siit and Tiaa is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Mid and Tiaa Cref Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Growth and Siit Small 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 Siit Small Mid are associated (or correlated) with Tiaa Cref. 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 Growth has no effect on the direction of Siit Small i.e., Siit Small and Tiaa Cref go up and down completely randomly.

Pair Corralation between Siit Small and Tiaa Cref

Assuming the 90 days horizon Siit Small Mid is expected to generate 0.34 times more return on investment than Tiaa Cref. However, Siit Small Mid is 2.9 times less risky than Tiaa Cref. It trades about -0.02 of its potential returns per unit of risk. Tiaa Cref Growth Income is currently generating about -0.19 per unit of risk. If you would invest  1,158  in Siit Small Mid on September 13, 2024 and sell it today you would lose (4.00) from holding Siit Small Mid or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Siit Small Mid  vs.  Tiaa Cref Growth Income

Siit Small Mid

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Small Mid are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tiaa Cref Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Growth Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Siit Small and Tiaa Cref

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

The idea behind Siit Small Mid and Tiaa Cref Growth Income 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.