Correlation Between Touchstone Small and Tiaa-cref Growth

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

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

Diversification Opportunities for Touchstone Small and Tiaa-cref Growth

0.88

Correlation Coefficient

Touchstone Small  Tiaa-cref Growth

Very poor diversification

The 3 months correlation between Touchstone and Tiaa-cref is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Tiaa Cref Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Growth and Touchstone Small 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 Touchstone Small Cap are associated (or correlated) with Tiaa-cref Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Growth has no effect on the direction of Touchstone Small i.e., Touchstone Small and Tiaa-cref Growth go up and down completely randomly.

Pair Corralation between Touchstone Small and Tiaa-cref Growth

Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.03 times more return on investment than Tiaa-cref Growth. However, Touchstone Small is 1.03 times more volatile than Tiaa Cref Growth Income. It trades about 0.03 of its potential returns per unit of risk. Tiaa Cref Growth Income is currently generating about 0.02 per unit of risk. If you would invest  3,532  in Touchstone Small Cap on December 4, 2024 and sell it today you would earn a total of  234.00  from holding Touchstone Small Cap or generate 6.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.59%
Values	Daily Returns

Touchstone Small Cap  vs.  Tiaa Cref Growth Income

Touchstone Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Touchstone Small Cap 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.

Tiaa Cref Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Growth Income 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 basic 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.

Pair Trading with Touchstone Small and Tiaa-cref Growth

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

The idea behind Touchstone Small Cap and Tiaa Cref Growth Income 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 Commodity Directory module to find actively traded commodities issued by global exchanges.