Correlation Between Tiaa-cref Small-cap and Financial Industries

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

Diversification Opportunities for Tiaa-cref Small-cap and Financial Industries

0.77

Correlation Coefficient

Tiaa-cref Small-cap  Financial Industries

Poor diversification

The 3 months correlation between Tiaa-cref and Financial is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Financial Industries Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Industries 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 Financial Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Industries has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Financial Industries go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Financial Industries

Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to generate 1.51 times more return on investment than Financial Industries. However, Tiaa-cref Small-cap is 1.51 times more volatile than Financial Industries Fund. It trades about 0.11 of its potential returns per unit of risk. Financial Industries Fund is currently generating about -0.06 per unit of risk. If you would invest  2,397  in Tiaa Cref Small Cap Blend on May 21, 2025 and sell it today you would earn a total of  62.00  from holding Tiaa Cref Small Cap Blend or generate 2.59% return on investment over 90 days.

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

Tiaa Cref Small Cap Blend  vs.  Financial Industries Fund

Tiaa-cref Small-cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Small Cap Blend are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Tiaa-cref Small-cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Financial Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Financial Industries Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Financial Industries 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 Financial Industries

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

The idea behind Tiaa Cref Small Cap Blend and Financial Industries 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 Commodity Directory module to find actively traded commodities issued by global exchanges.