Correlation Between Tiaa-cref Mid-cap and Champlain Small

Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Mid-cap and Champlain 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 Mid-cap and Champlain Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tiaa Cref Mid Cap Value and Champlain Small, you can compare the effects of market volatilities on Tiaa-cref Mid-cap and Champlain 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 Mid-cap with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Mid-cap and Champlain Small.

Diversification Opportunities for Tiaa-cref Mid-cap and Champlain Small

0.89

Correlation Coefficient

Tiaa-cref Mid-cap  Champlain Small

Very poor diversification

The 3 months correlation between Tiaa-cref and Champlain is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Mid Cap Value and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Tiaa-cref Mid-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 Mid Cap Value are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Tiaa-cref Mid-cap i.e., Tiaa-cref Mid-cap and Champlain Small go up and down completely randomly.

Pair Corralation between Tiaa-cref Mid-cap and Champlain Small

Assuming the 90 days horizon Tiaa Cref Mid Cap Value is expected to generate 0.84 times more return on investment than Champlain Small. However, Tiaa Cref Mid Cap Value is 1.19 times less risky than Champlain Small. It trades about -0.03 of its potential returns per unit of risk. Champlain Small is currently generating about -0.07 per unit of risk. If you would invest  1,773  in Tiaa Cref Mid Cap Value on December 27, 2024 and sell it today you would lose (34.00) from holding Tiaa Cref Mid Cap Value or give up 1.92% of portfolio value over 90 days.

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

Tiaa Cref Mid Cap Value  vs.  Champlain Small

Tiaa-cref Mid-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Mid Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tiaa-cref Mid-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Champlain Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Champlain Small 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 Mid-cap and Champlain Small

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

The idea behind Tiaa Cref Mid Cap Value and Champlain 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.