Correlation Between Tiaa Cref and The Gabelli

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

By analyzing existing cross correlation between Tiaa Cref Smallmid Cap Equity and The Gabelli Small, you can compare the effects of market volatilities on Tiaa Cref and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and The Gabelli.

Diversification Opportunities for Tiaa Cref and The Gabelli

0.89

Correlation Coefficient

Tiaa Cref  The Gabelli

Very poor diversification

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

Pair Corralation between Tiaa Cref and The Gabelli

Assuming the 90 days horizon Tiaa Cref Smallmid Cap Equity is expected to under-perform the The Gabelli. In addition to that, Tiaa Cref is 1.77 times more volatile than The Gabelli Small. It trades about -0.17 of its total potential returns per unit of risk. The Gabelli Small is currently generating about -0.15 per unit of volatility. If you would invest  4,722  in The Gabelli Small on December 1, 2024 and sell it today you would lose (396.00) from holding The Gabelli Small or give up 8.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Tiaa Cref Smallmid Cap Equity  vs.  The Gabelli Small

Tiaa Cref Smallmid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Smallmid Cap Equity 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 primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Gabelli Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tiaa Cref and The Gabelli

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

The idea behind Tiaa Cref Smallmid Cap Equity and The Gabelli 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.