Correlation Between Tiaa Cref and Eagle Small

Can any of the company-specific risk be diversified away by investing in both Tiaa Cref and Eagle Small 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 and Eagle Small 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 Value and Eagle Small Cap, you can compare the effects of market volatilities on Tiaa Cref and Eagle Small 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 with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Eagle Small.

Diversification Opportunities for Tiaa Cref and Eagle Small

0.73

Correlation Coefficient

Tiaa Cref  Eagle Small

Poor diversification

The 3 months correlation between Tiaa and Eagle is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Tiaa Cref 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 Value are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Eagle Small go up and down completely randomly.

Pair Corralation between Tiaa Cref and Eagle Small

Assuming the 90 days horizon Tiaa Cref Large Cap Value is expected to generate 0.75 times more return on investment than Eagle Small. However, Tiaa Cref Large Cap Value is 1.34 times less risky than Eagle Small. It trades about 0.06 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.04 per unit of risk. If you would invest  1,747  in Tiaa Cref Large Cap Value on September 15, 2024 and sell it today you would earn a total of  524.00  from holding Tiaa Cref Large Cap Value or generate 29.99% return on investment over 90 days.

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

Tiaa Cref Large Cap Value  vs.  Eagle Small Cap

Tiaa Cref Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Large Cap Value 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.

Eagle Small Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Eagle Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tiaa Cref and Eagle Small

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

The idea behind Tiaa Cref Large Cap Value and Eagle Small Cap 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.