Correlation Between Tiaa-cref Small-cap and Short-term Investment

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

Diversification Opportunities for Tiaa-cref Small-cap and Short-term Investment

0.0

Correlation Coefficient

Tiaa-cref Small-cap  Short-term Investment

Pay attention - limited upside

The 3 months correlation between Tiaa-cref and Short-term is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Short Term Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Investment 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 Short-term Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Investment has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Short-term Investment go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Short-term Investment

Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to generate 10.08 times more return on investment than Short-term Investment. However, Tiaa-cref Small-cap is 10.08 times more volatile than Short Term Investment Trust. It trades about 0.03 of its potential returns per unit of risk. Short Term Investment Trust is currently generating about 0.13 per unit of risk. If you would invest  2,024  in Tiaa Cref Small Cap Blend on October 10, 2024 and sell it today you would earn a total of  375.00  from holding Tiaa Cref Small Cap Blend or generate 18.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tiaa Cref Small Cap Blend  vs.  Short Term Investment Trust

Tiaa-cref Small-cap

Risk-Adjusted Performance

0 of 100

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.

Short Term Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Short Term Investment Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Short-term Investment 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 Short-term Investment

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

The idea behind Tiaa Cref Small Cap Blend and Short Term Investment Trust 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.