Correlation Between Tiaa Cref and Walden Smid

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

By analyzing existing cross correlation between Tiaa Cref Equity Index and Walden Smid Cap, you can compare the effects of market volatilities on Tiaa Cref and Walden Smid 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 with a short position of Walden Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa Cref and Walden Smid.

Diversification Opportunities for Tiaa Cref and Walden Smid

0.93

Correlation Coefficient

Tiaa Cref  Walden Smid

Almost no diversification

The 3 months correlation between Tiaa and Walden is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Equity Index and Walden Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Smid Cap and Tiaa Cref 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 Equity Index are associated (or correlated) with Walden Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Smid Cap has no effect on the direction of Tiaa Cref i.e., Tiaa Cref and Walden Smid go up and down completely randomly.

Pair Corralation between Tiaa Cref and Walden Smid

Assuming the 90 days horizon Tiaa Cref Equity Index is expected to under-perform the Walden Smid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tiaa Cref Equity Index is 1.25 times less risky than Walden Smid. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Walden Smid Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,637  in Walden Smid Cap on September 13, 2024 and sell it today you would earn a total of  30.00  from holding Walden Smid Cap or generate 1.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Tiaa Cref Equity Index  vs.  Walden Smid Cap

Tiaa Cref Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Equity Index are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Walden Smid Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walden Smid Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Walden Smid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tiaa Cref and Walden Smid

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

The idea behind Tiaa Cref Equity Index and Walden Smid Cap 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.