Correlation Between Intermediate Government and Tiaa-cref Bond

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

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

Diversification Opportunities for Intermediate Government and Tiaa-cref Bond

0.62

Correlation Coefficient

Intermediate Government  Tiaa-cref Bond

Poor diversification

The 3 months correlation between Intermediate and Tiaa-cref is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Government Bond and Tiaa Cref Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Bond and Intermediate Government 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 Intermediate Government Bond are associated (or correlated) with Tiaa-cref Bond. 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 Bond has no effect on the direction of Intermediate Government i.e., Intermediate Government and Tiaa-cref Bond go up and down completely randomly.

Pair Corralation between Intermediate Government and Tiaa-cref Bond

Assuming the 90 days horizon Intermediate Government is expected to generate 1.86 times less return on investment than Tiaa-cref Bond. But when comparing it to its historical volatility, Intermediate Government Bond is 2.15 times less risky than Tiaa-cref Bond. It trades about 0.17 of its potential returns per unit of risk. Tiaa Cref Bond Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  894.00  in Tiaa Cref Bond Fund on May 18, 2025 and sell it today you would earn a total of  23.00  from holding Tiaa Cref Bond Fund or generate 2.57% return on investment over 90 days.

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

Intermediate Government Bond  vs.  Tiaa Cref Bond Fund

Intermediate Government

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Government Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Intermediate Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Bond Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa-cref Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intermediate Government and Tiaa-cref Bond

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

The idea behind Intermediate Government Bond and Tiaa Cref Bond 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 Global Correlations module to find global opportunities by holding instruments from different markets.