Correlation Between Tiaa-cref Small-cap and Harbor International

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

Diversification Opportunities for Tiaa-cref Small-cap and Harbor International

-0.44

Correlation Coefficient

Tiaa-cref Small-cap  Harbor International

Very good diversification

The 3 months correlation between Tiaa-cref and Harbor is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Equity and Harbor International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor International 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 Equity are associated (or correlated) with Harbor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor International has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Harbor International go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Harbor International

Assuming the 90 days horizon Tiaa Cref Small Cap Equity is expected to under-perform the Harbor International. In addition to that, Tiaa-cref Small-cap is 1.46 times more volatile than Harbor International Fund. It trades about -0.1 of its total potential returns per unit of risk. Harbor International Fund is currently generating about 0.21 per unit of volatility. If you would invest  4,390  in Harbor International Fund on December 19, 2024 and sell it today you would earn a total of  485.00  from holding Harbor International Fund or generate 11.05% 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 Small Cap Equity  vs.  Harbor International Fund

Tiaa-cref Small-cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Small Cap Equity 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.

Harbor International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor International Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tiaa-cref Small-cap and Harbor International

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

The idea behind Tiaa Cref Small Cap Equity and Harbor International Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.