Correlation Between Tiaa-cref Small-cap and Capital Management

Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small-cap and Capital Management 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 Capital Management 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 Blend and Capital Management Mid Cap, you can compare the effects of market volatilities on Tiaa-cref Small-cap and Capital Management 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 Capital Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small-cap and Capital Management.

Diversification Opportunities for Tiaa-cref Small-cap and Capital Management

0.06

Correlation Coefficient

Tiaa-cref Small-cap  Capital Management

Significant diversification

The 3 months correlation between Tiaa-cref and Capital is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Capital Management Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Management Mid 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 Blend are associated (or correlated) with Capital Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Management Mid has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Capital Management go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Capital Management

Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to generate 1.47 times more return on investment than Capital Management. However, Tiaa-cref Small-cap is 1.47 times more volatile than Capital Management Mid Cap. It trades about 0.2 of its potential returns per unit of risk. Capital Management Mid Cap is currently generating about 0.04 per unit of risk. If you would invest  2,217  in Tiaa Cref Small Cap Blend on May 28, 2025 and sell it today you would earn a total of  323.00  from holding Tiaa Cref Small Cap Blend or generate 14.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Tiaa Cref Small Cap Blend  vs.  Capital Management Mid Cap

Tiaa-cref Small-cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Small Cap Blend are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Tiaa-cref Small-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Capital Management Mid

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Management Mid Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Capital Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa-cref Small-cap and Capital Management

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

The idea behind Tiaa Cref Small Cap Blend and Capital Management Mid 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.