Correlation Between Tiaa-cref Small-cap and Utilities Fund

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

Diversification Opportunities for Tiaa-cref Small-cap and Utilities Fund

0.76

Correlation Coefficient

Tiaa-cref Small-cap  Utilities Fund

Poor diversification

The 3 months correlation between Tiaa-cref and Utilities is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Equity and Utilities Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Class 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 Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Class has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Utilities Fund go up and down completely randomly.

Pair Corralation between Tiaa-cref Small-cap and Utilities Fund

Assuming the 90 days horizon Tiaa Cref Small Cap Equity is expected to generate 1.34 times more return on investment than Utilities Fund. However, Tiaa-cref Small-cap is 1.34 times more volatile than Utilities Fund Class. It trades about 0.14 of its potential returns per unit of risk. Utilities Fund Class is currently generating about 0.1 per unit of risk. If you would invest  1,776  in Tiaa Cref Small Cap Equity on May 19, 2025 and sell it today you would earn a total of  164.00  from holding Tiaa Cref Small Cap Equity or generate 9.23% 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 Equity  vs.  Utilities Fund Class

Tiaa-cref Small-cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Small Cap Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Tiaa-cref Small-cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Utilities Fund Class

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Fund Class are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Utilities Fund 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 Utilities Fund

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

The idea behind Tiaa Cref Small Cap Equity and Utilities 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.