Correlation Between Tiaa-cref Intl and Tiaa-cref Small/mid-cap

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

By analyzing existing cross correlation between Tiaa Cref Intl Bond and Tiaa Cref Smallmid Cap Equity, you can compare the effects of market volatilities on Tiaa-cref Intl and Tiaa-cref Small/mid-cap 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 Intl with a short position of Tiaa-cref Small/mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Intl and Tiaa-cref Small/mid-cap.

Diversification Opportunities for Tiaa-cref Intl and Tiaa-cref Small/mid-cap

0.28

Correlation Coefficient

Tiaa-cref Intl  Tiaa-cref Small/mid-cap

Modest diversification

The 3 months correlation between Tiaa-cref and Tiaa-cref is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Intl Bond and Tiaa Cref Smallmid Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small/mid-cap and Tiaa-cref Intl 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 Intl Bond are associated (or correlated) with Tiaa-cref Small/mid-cap. 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 Small/mid-cap has no effect on the direction of Tiaa-cref Intl i.e., Tiaa-cref Intl and Tiaa-cref Small/mid-cap go up and down completely randomly.

Pair Corralation between Tiaa-cref Intl and Tiaa-cref Small/mid-cap

Assuming the 90 days horizon Tiaa Cref Intl Bond is expected to generate 0.16 times more return on investment than Tiaa-cref Small/mid-cap. However, Tiaa Cref Intl Bond is 6.23 times less risky than Tiaa-cref Small/mid-cap. It trades about -0.09 of its potential returns per unit of risk. Tiaa Cref Smallmid Cap Equity is currently generating about -0.19 per unit of risk. If you would invest  872.00  in Tiaa Cref Intl Bond on December 11, 2024 and sell it today you would lose (9.00) from holding Tiaa Cref Intl Bond or give up 1.03% of portfolio value over 90 days.

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

Tiaa Cref Intl Bond  vs.  Tiaa Cref Smallmid Cap Equity

Tiaa Cref Intl

Risk-Adjusted Performance

Very Weak

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

Tiaa-cref Small/mid-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Smallmid Cap Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Tiaa-cref Intl and Tiaa-cref Small/mid-cap

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

The idea behind Tiaa Cref Intl Bond and Tiaa Cref Smallmid Cap Equity 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.