Correlation Between Tiaa-cref Lifecycle and Midcap Fund

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

By analyzing existing cross correlation between Tiaa Cref Lifecycle Retirement and Midcap Fund Class, you can compare the effects of market volatilities on Tiaa-cref Lifecycle and Midcap Fund 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 Lifecycle with a short position of Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Lifecycle and Midcap Fund.

Diversification Opportunities for Tiaa-cref Lifecycle and Midcap Fund

0.91

Correlation Coefficient

Tiaa-cref Lifecycle  Midcap Fund

Almost no diversification

The 3 months correlation between Tiaa-cref and Midcap is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Lifecycle Retirement and Midcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund Class and Tiaa-cref Lifecycle 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 Lifecycle Retirement are associated (or correlated) with Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund Class has no effect on the direction of Tiaa-cref Lifecycle i.e., Tiaa-cref Lifecycle and Midcap Fund go up and down completely randomly.

Pair Corralation between Tiaa-cref Lifecycle and Midcap Fund

Assuming the 90 days horizon Tiaa-cref Lifecycle is expected to generate 1.44 times less return on investment than Midcap Fund. But when comparing it to its historical volatility, Tiaa Cref Lifecycle Retirement is 2.78 times less risky than Midcap Fund. It trades about 0.26 of its potential returns per unit of risk. Midcap Fund Class is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,543  in Midcap Fund Class on May 2, 2025 and sell it today you would earn a total of  229.00  from holding Midcap Fund Class or generate 6.46% 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 Lifecycle Retirement  vs.  Midcap Fund Class

Tiaa Cref Lifecycle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifecycle Retirement are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Tiaa-cref Lifecycle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Midcap Fund Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Fund Class are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Midcap Fund may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Tiaa-cref Lifecycle and Midcap Fund

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

The idea behind Tiaa Cref Lifecycle Retirement and Midcap Fund Class 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.