Correlation Between Tiaa-cref Large-cap and Tiaa-cref Equity

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

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

Diversification Opportunities for Tiaa-cref Large-cap and Tiaa-cref Equity

0.96

Correlation Coefficient

Tiaa-cref Large-cap  Tiaa-cref Equity

Almost no diversification

The 3 months correlation between Tiaa-cref and Tiaa-cref is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Growth and Tiaa Cref Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Equity and Tiaa-cref Large-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 Large Cap Growth are associated (or correlated) with Tiaa-cref Equity. 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 Equity has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Tiaa-cref Equity go up and down completely randomly.

Pair Corralation between Tiaa-cref Large-cap and Tiaa-cref Equity

Assuming the 90 days horizon Tiaa Cref Large Cap Growth is expected to under-perform the Tiaa-cref Equity. In addition to that, Tiaa-cref Large-cap is 1.38 times more volatile than Tiaa Cref Equity Index. It trades about -0.12 of its total potential returns per unit of risk. Tiaa Cref Equity Index is currently generating about -0.08 per unit of volatility. If you would invest  4,161  in Tiaa Cref Equity Index on December 22, 2024 and sell it today you would lose (210.00) from holding Tiaa Cref Equity Index or give up 5.05% of portfolio value over 90 days.

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

Tiaa Cref Large Cap Growth  vs.  Tiaa Cref Equity Index

Tiaa-cref Large-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Large Cap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tiaa Cref Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tiaa-cref Large-cap and Tiaa-cref Equity

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

The idea behind Tiaa Cref Large Cap Growth and Tiaa Cref Equity Index 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..