Correlation Between Tiaa-cref Small-cap and Massmutual Premier

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

Diversification Opportunities for Tiaa-cref Small-cap and Massmutual Premier

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Tiaa-cref and Massmutual is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Massmutual Premier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier Small 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 Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier Small has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Massmutual Premier go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Massmutual Premier

Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to generate 0.92 times more return on investment than Massmutual Premier. However, Tiaa Cref Small Cap Blend is 1.09 times less risky than Massmutual Premier. It trades about -0.02 of its potential returns per unit of risk. Massmutual Premier Small is currently generating about -0.04 per unit of risk. If you would invest  2,478  in Tiaa Cref Small Cap Blend on October 8, 2024 and sell it today you would lose (60.00) from holding Tiaa Cref Small Cap Blend or give up 2.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Tiaa Cref Small Cap Blend  vs.  Massmutual Premier Small

 Performance 
       Timeline  
Tiaa-cref Small-cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fairly strong fundamental drivers, Tiaa-cref Small-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Massmutual Premier Small 

Risk-Adjusted Performance

0 of 100

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

Tiaa-cref Small-cap and Massmutual Premier Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tiaa-cref Small-cap and Massmutual Premier

The main advantage of trading using opposite Tiaa-cref Small-cap and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small-cap position performs unexpectedly, Massmutual Premier 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 Massmutual Premier will offset losses from the drop in Massmutual Premier's long position.
The idea behind Tiaa Cref Small Cap Blend and Massmutual Premier Small 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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