Correlation Between Moderate Duration and Tiaa Cref

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

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

Diversification Opportunities for Moderate Duration and Tiaa Cref

0.85

Correlation Coefficient

Moderate Duration  Tiaa Cref

Very poor diversification

The 3 months correlation between Moderate and Tiaa is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Duration Fund and Tiaa Cref Lifestyle Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle and Moderate Duration 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 Moderate Duration Fund 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 Lifestyle has no effect on the direction of Moderate Duration i.e., Moderate Duration and Tiaa Cref go up and down completely randomly.

Pair Corralation between Moderate Duration and Tiaa Cref

Assuming the 90 days horizon Moderate Duration is expected to generate 2.23 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Moderate Duration Fund is 1.87 times less risky than Tiaa Cref. It trades about 0.18 of its potential returns per unit of risk. Tiaa Cref Lifestyle Moderate is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,501  in Tiaa Cref Lifestyle Moderate on May 15, 2025 and sell it today you would earn a total of  81.00  from holding Tiaa Cref Lifestyle Moderate or generate 5.4% return on investment over 90 days.

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

Moderate Duration Fund  vs.  Tiaa Cref Lifestyle Moderate

Moderate Duration

Risk-Adjusted Performance

Good

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

Tiaa Cref Lifestyle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifestyle Moderate are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary 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 Moderate Duration and Tiaa Cref

The main advantage of trading using opposite Moderate Duration and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Duration 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 Moderate Duration Fund and Tiaa Cref Lifestyle Moderate 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.