Correlation Between Invesco Small and Tiaa Cref

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

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

Diversification Opportunities for Invesco Small and Tiaa Cref

0.9

Correlation Coefficient

Invesco Small  Tiaa Cref

Almost no diversification

The 3 months correlation between Invesco and Tiaa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Small Cap and Tiaa Cref Social Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Social and Invesco Small 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 Invesco Small Cap are associated (or correlated) with Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Social has no effect on the direction of Invesco Small i.e., Invesco Small and Tiaa Cref go up and down completely randomly.

Pair Corralation between Invesco Small and Tiaa Cref

Assuming the 90 days horizon Invesco Small Cap is expected to generate 1.34 times more return on investment than Tiaa Cref. However, Invesco Small is 1.34 times more volatile than Tiaa Cref Social Choice. It trades about 0.22 of its potential returns per unit of risk. Tiaa Cref Social Choice is currently generating about 0.11 per unit of risk. If you would invest  2,141  in Invesco Small Cap on May 2, 2025 and sell it today you would earn a total of  304.00  from holding Invesco Small Cap or generate 14.2% return on investment over 90 days.

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

Invesco Small Cap  vs.  Tiaa Cref Social Choice

Invesco Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Small Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Small showed solid returns over the last few months and may actually be approaching a breakup point.

Tiaa Cref Social

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Social Choice are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Small and Tiaa Cref

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

The idea behind Invesco Small Cap and Tiaa Cref Social Choice 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.