Correlation Between Tiaa-cref Large-cap and Timothy Largemid

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

Diversification Opportunities for Tiaa-cref Large-cap and Timothy Largemid

0.9

Correlation Coefficient

Tiaa-cref Large-cap  Timothy Largemid

Almost no diversification

The 3 months correlation between Tiaa-cref and Timothy is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Large Cap Value and Timothy Largemid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Largemid Cap 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 Value are associated (or correlated) with Timothy Largemid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Largemid Cap has no effect on the direction of Tiaa-cref Large-cap i.e., Tiaa-cref Large-cap and Timothy Largemid go up and down completely randomly.

Pair Corralation between Tiaa-cref Large-cap and Timothy Largemid

Assuming the 90 days horizon Tiaa Cref Large Cap Value is expected to generate 0.35 times more return on investment than Timothy Largemid. However, Tiaa Cref Large Cap Value is 2.83 times less risky than Timothy Largemid. It trades about -0.23 of its potential returns per unit of risk. Timothy Largemid Cap Value is currently generating about -0.3 per unit of risk. If you would invest  2,297  in Tiaa Cref Large Cap Value on October 9, 2024 and sell it today you would lose (77.00) from holding Tiaa Cref Large Cap Value or give up 3.35% 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 Value  vs.  Timothy Largemid Cap Value

Tiaa-cref Large-cap

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 forward indicators, Tiaa-cref Large-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Timothy Largemid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Timothy Largemid Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Tiaa-cref Large-cap and Timothy Largemid

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

The idea behind Tiaa Cref Large Cap Value and Timothy Largemid Cap Value 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 Transaction History module to view history of all your transactions and understand their impact on performance.