Correlation Between Tiaa-cref Small-cap and Qs Growth

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

Diversification Opportunities for Tiaa-cref Small-cap and Qs Growth

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Tiaa-cref and LANIX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Equity and Qs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Growth Fund 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 Qs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Growth Fund has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Qs Growth go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Qs Growth

Assuming the 90 days horizon Tiaa Cref Small Cap Equity is expected to generate 1.48 times more return on investment than Qs Growth. However, Tiaa-cref Small-cap is 1.48 times more volatile than Qs Growth Fund. It trades about 0.29 of its potential returns per unit of risk. Qs Growth Fund is currently generating about 0.37 per unit of risk. If you would invest  1,537  in Tiaa Cref Small Cap Equity on April 19, 2025 and sell it today you would earn a total of  310.00  from holding Tiaa Cref Small Cap Equity or generate 20.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Tiaa Cref Small Cap Equity  vs.  Qs Growth Fund

 Performance 
       Timeline  
Tiaa-cref Small-cap 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Small Cap Equity are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Tiaa-cref Small-cap showed solid returns over the last few months and may actually be approaching a breakup point.
Qs Growth Fund 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Qs Growth Fund are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Qs Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa-cref Small-cap and Qs Growth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tiaa-cref Small-cap and Qs Growth

The main advantage of trading using opposite Tiaa-cref Small-cap and Qs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small-cap position performs unexpectedly, Qs 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 Qs Growth will offset losses from the drop in Qs Growth's long position.
The idea behind Tiaa Cref Small Cap Equity and Qs Growth 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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