Correlation Between Pimco Inflation and Tiaa Cref

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

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

Diversification Opportunities for Pimco Inflation and Tiaa Cref

0.87

Correlation Coefficient

Pimco Inflation  Tiaa Cref

Very poor diversification

The 3 months correlation between Pimco and Tiaa is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Inflation Response and Tiaa Cref Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Large and Pimco Inflation 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 Pimco Inflation Response 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 Large has no effect on the direction of Pimco Inflation i.e., Pimco Inflation and Tiaa Cref go up and down completely randomly.

Pair Corralation between Pimco Inflation and Tiaa Cref

Assuming the 90 days horizon Pimco Inflation is expected to generate 5.18 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Pimco Inflation Response is 2.7 times less risky than Tiaa Cref. It trades about 0.13 of its potential returns per unit of risk. Tiaa Cref Large Cap Growth is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  6,261  in Tiaa Cref Large Cap Growth on May 5, 2025 and sell it today you would earn a total of  968.00  from holding Tiaa Cref Large Cap Growth or generate 15.46% return on investment over 90 days.

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

Pimco Inflation Response  vs.  Tiaa Cref Large Cap Growth

Pimco Inflation Response

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Inflation Response are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Pimco Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Large Cap Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Tiaa Cref showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pimco Inflation and Tiaa Cref

The main advantage of trading using opposite Pimco Inflation and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Inflation 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 Pimco Inflation Response and Tiaa Cref Large Cap Growth 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.