Correlation Between Small Cap and Tiaa-cref Large-cap
Can any of the company-specific risk be diversified away by investing in both Small Cap and Tiaa-cref Large-cap 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 Large-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Tiaa Cref Large Cap Value, you can compare the effects of market volatilities on Small Cap and Tiaa-cref Large-cap 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 Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Tiaa-cref Large-cap.
Diversification Opportunities for Small Cap and Tiaa-cref Large-cap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and TIAA-CREF is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Tiaa Cref Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Large-cap 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 Equity are associated (or correlated) with Tiaa-cref Large-cap. 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 Large-cap has no effect on the direction of Small Cap i.e., Small Cap and Tiaa-cref Large-cap go up and down completely randomly.
Pair Corralation between Small Cap and Tiaa-cref Large-cap
Assuming the 90 days horizon Small Cap Equity is expected to generate 1.69 times more return on investment than Tiaa-cref Large-cap. However, Small Cap is 1.69 times more volatile than Tiaa Cref Large Cap Value. It trades about 0.17 of its potential returns per unit of risk. Tiaa Cref Large Cap Value is currently generating about 0.19 per unit of risk. If you would invest 1,663 in Small Cap Equity on June 2, 2025 and sell it today you would earn a total of 183.00 from holding Small Cap Equity or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Equity vs. Tiaa Cref Large Cap Value
Performance |
| Timeline |
| Small Cap Equity |
| Tiaa-cref Large-cap |
Small Cap and Tiaa-cref Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Tiaa-cref Large-cap
The main advantage of trading using opposite Small Cap and Tiaa-cref Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Tiaa-cref Large-cap 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 Large-cap will offset losses from the drop in Tiaa-cref Large-cap's long position.| Small Cap vs. Wells Fargo Diversified | Small Cap vs. Pgim Conservative Retirement | Small Cap vs. Tiaa Cref Lifestyle Conservative | Small Cap vs. Wells Fargo Diversified |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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