Correlation Between Swan Defined and Tiaa-cref Inflation-linked

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

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

Diversification Opportunities for Swan Defined and Tiaa-cref Inflation-linked

0.94

Correlation Coefficient

Swan Defined  Tiaa-cref Inflation-linked

Almost no diversification

The 3 months correlation between Swan and Tiaa-cref is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Tiaa Cref Inflation Linked Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Inflation-linked and Swan Defined 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 Swan Defined Risk are associated (or correlated) with Tiaa-cref Inflation-linked. 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 Inflation-linked has no effect on the direction of Swan Defined i.e., Swan Defined and Tiaa-cref Inflation-linked go up and down completely randomly.

Pair Corralation between Swan Defined and Tiaa-cref Inflation-linked

Assuming the 90 days horizon Swan Defined Risk is expected to generate 1.88 times more return on investment than Tiaa-cref Inflation-linked. However, Swan Defined is 1.88 times more volatile than Tiaa Cref Inflation Linked Bond. It trades about 0.21 of its potential returns per unit of risk. Tiaa Cref Inflation Linked Bond is currently generating about 0.18 per unit of risk. If you would invest  1,484  in Swan Defined Risk on May 18, 2025 and sell it today you would earn a total of  69.00  from holding Swan Defined Risk or generate 4.65% return on investment over 90 days.

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

Swan Defined Risk  vs.  Tiaa Cref Inflation Linked Bon

Swan Defined Risk

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swan Defined Risk are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Swan Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa-cref Inflation-linked

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Inflation Linked Bond are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Tiaa-cref Inflation-linked is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Swan Defined and Tiaa-cref Inflation-linked

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

The idea behind Swan Defined Risk and Tiaa Cref Inflation Linked Bond 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.