Correlation Between Small Cap and Tiaa-cref Emerging
Can any of the company-specific risk be diversified away by investing in both Small Cap and Tiaa-cref Emerging 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 Small Cap and Tiaa-cref Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value Fund and Tiaa Cref Emerging Markets, you can compare the effects of market volatilities on Small Cap and Tiaa-cref Emerging 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 Small Cap with a short position of Tiaa-cref Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Tiaa-cref Emerging.
Diversification Opportunities for Small Cap and Tiaa-cref Emerging
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Tiaa-cref is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value Fund and Tiaa Cref Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Emerging and 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 Small Cap Value Fund are associated (or correlated) with Tiaa-cref Emerging. 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 Emerging has no effect on the direction of Small Cap i.e., Small Cap and Tiaa-cref Emerging go up and down completely randomly.
Pair Corralation between Small Cap and Tiaa-cref Emerging
Assuming the 90 days horizon Small Cap Value Fund is expected to generate 1.73 times more return on investment than Tiaa-cref Emerging. However, Small Cap is 1.73 times more volatile than Tiaa Cref Emerging Markets. It trades about 0.18 of its potential returns per unit of risk. Tiaa Cref Emerging Markets is currently generating about 0.22 per unit of risk. If you would invest 3,376 in Small Cap Value Fund on May 31, 2025 and sell it today you would earn a total of 479.00 from holding Small Cap Value Fund or generate 14.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Value Fund vs. Tiaa Cref Emerging Markets
Performance |
| Timeline |
| Small Cap Value |
| Tiaa Cref Emerging |
Small Cap and Tiaa-cref Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Tiaa-cref Emerging
The main advantage of trading using opposite Small Cap and Tiaa-cref Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Tiaa-cref Emerging 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 Emerging will offset losses from the drop in Tiaa-cref Emerging's long position.| Small Cap vs. Bridgeway Global Opportunities | Small Cap vs. Ultra Small Pany Market | Small Cap vs. Ultra Small Pany Fund |
| Tiaa-cref Emerging vs. Gabelli Global Financial | Tiaa-cref Emerging vs. Financials Ultrasector Profund | Tiaa-cref Emerging vs. Davis Financial Fund | Tiaa-cref Emerging vs. John Hancock Financial |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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