Correlation Between Tiaa-cref Inflation-linked and Fidelity Freedom

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Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Inflation-linked and Fidelity Freedom 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 Tiaa-cref Inflation-linked and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Inflation Linked Bond and Fidelity Freedom Blend, you can compare the effects of market volatilities on Tiaa-cref Inflation-linked and Fidelity Freedom 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 Tiaa-cref Inflation-linked with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Inflation-linked and Fidelity Freedom.

Diversification Opportunities for Tiaa-cref Inflation-linked and Fidelity Freedom

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Tiaa-cref and Fidelity is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Inflation Linked Bon and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Tiaa-cref Inflation-linked 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 Tiaa Cref Inflation Linked Bond are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Blend has no effect on the direction of Tiaa-cref Inflation-linked i.e., Tiaa-cref Inflation-linked and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Tiaa-cref Inflation-linked and Fidelity Freedom

Assuming the 90 days horizon Tiaa-cref Inflation-linked is expected to generate 2.96 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Tiaa Cref Inflation Linked Bond is 3.17 times less risky than Fidelity Freedom. It trades about 0.21 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,077  in Fidelity Freedom Blend on May 15, 2025 and sell it today you would earn a total of  74.00  from holding Fidelity Freedom Blend or generate 6.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.36%
ValuesDaily Returns

Tiaa Cref Inflation Linked Bon  vs.  Fidelity Freedom Blend

 Performance 
       Timeline  
Tiaa-cref Inflation-linked 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Inflation Linked Bond are ranked lower than 16 (%) 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.
Fidelity Freedom Blend 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom Blend are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Freedom may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Tiaa-cref Inflation-linked and Fidelity Freedom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tiaa-cref Inflation-linked and Fidelity Freedom

The main advantage of trading using opposite Tiaa-cref Inflation-linked and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Inflation-linked position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.
The idea behind Tiaa Cref Inflation Linked Bond and Fidelity Freedom Blend 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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