Correlation Between Tiaa Cref and Lsv Small

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

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

Diversification Opportunities for Tiaa Cref and Lsv Small

-0.45

Correlation Coefficient

Tiaa Cref  Lsv Small

Very good diversification

The 3 months correlation between Tiaa and Lsv is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Social Choice and Lsv Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Small Cap and Tiaa Cref 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 Social Choice are associated (or correlated) with Lsv Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Small Cap has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Lsv Small go up and down completely randomly.

Pair Corralation between Tiaa Cref and Lsv Small

Assuming the 90 days horizon Tiaa Cref Social Choice is expected to under-perform the Lsv Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Social Choice is 3.68 times less risky than Lsv Small. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Lsv Small Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,918  in Lsv Small Cap on September 15, 2024 and sell it today you would earn a total of  117.00  from holding Lsv Small Cap or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tiaa Cref Social Choice  vs.  Lsv Small Cap

Tiaa Cref Social

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lsv Small Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lsv 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 and Lsv Small

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

The idea behind Tiaa Cref Social Choice and Lsv Small Cap 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.

Check out your portfolio center.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.