Correlation Between Federated Municipal and Tiaa Cref

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

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

Diversification Opportunities for Federated Municipal and Tiaa Cref

0.83

Correlation Coefficient

Federated Municipal  Tiaa Cref

Very poor diversification

The 3 months correlation between Federated and Tiaa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Federated Municipal High and Tiaa Cref Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Small and Federated Municipal 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 Federated Municipal High 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 Small has no effect on the direction of Federated Municipal i.e., Federated Municipal and Tiaa Cref go up and down completely randomly.

Pair Corralation between Federated Municipal and Tiaa Cref

Assuming the 90 days horizon Federated Municipal is expected to generate 1.75 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Federated Municipal High is 6.02 times less risky than Tiaa Cref. It trades about 0.42 of its potential returns per unit of risk. Tiaa Cref Small Cap Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,858  in Tiaa Cref Small Cap Equity on July 22, 2025 and sell it today you would earn a total of  174.00  from holding Tiaa Cref Small Cap Equity or generate 9.36% return on investment over 90 days.

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

Federated Municipal High  vs.  Tiaa Cref Small Cap Equity

Federated Municipal High

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Municipal High are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Small

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 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Federated Municipal and Tiaa Cref

The main advantage of trading using opposite Federated Municipal and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Municipal 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 Federated Municipal High and Tiaa Cref Small Cap Equity 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.