Correlation Between Tiaa-cref Small-cap and Columbia Treasury

Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small-cap and Columbia Treasury 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 Columbia Treasury 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 Blend and Columbia Treasury Index, you can compare the effects of market volatilities on Tiaa-cref Small-cap and Columbia Treasury 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 Columbia Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small-cap and Columbia Treasury.

Diversification Opportunities for Tiaa-cref Small-cap and Columbia Treasury

-0.72

Correlation Coefficient

Tiaa-cref Small-cap  Columbia Treasury

Pay attention - limited upside

The 3 months correlation between Tiaa-cref and Columbia is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Columbia Treasury Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Treasury Index 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 Blend are associated (or correlated) with Columbia Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Treasury Index has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Columbia Treasury go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Columbia Treasury

Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to under-perform the Columbia Treasury. In addition to that, Tiaa-cref Small-cap is 4.07 times more volatile than Columbia Treasury Index. It trades about -0.09 of its total potential returns per unit of risk. Columbia Treasury Index is currently generating about 0.14 per unit of volatility. If you would invest  966.00  in Columbia Treasury Index on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Columbia Treasury Index or generate 2.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Tiaa Cref Small Cap Blend  vs.  Columbia Treasury Index

Tiaa-cref Small-cap

Risk-Adjusted Performance

Very Weak

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

Columbia Treasury Index

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Treasury Index are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Columbia Treasury 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 Small-cap and Columbia Treasury

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

The idea behind Tiaa Cref Small Cap Blend and Columbia Treasury 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.