Correlation Between Tiaa-cref Bond and Vanguard Energy

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

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

Diversification Opportunities for Tiaa-cref Bond and Vanguard Energy

0.74

Correlation Coefficient

Tiaa-cref Bond  Vanguard Energy

Poor diversification

The 3 months correlation between Tiaa-cref and Vanguard is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Bond Fund and Vanguard Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Energy and Tiaa-cref Bond 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 Bond Fund are associated (or correlated) with Vanguard Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Energy has no effect on the direction of Tiaa-cref Bond i.e., Tiaa-cref Bond and Vanguard Energy go up and down completely randomly.

Pair Corralation between Tiaa-cref Bond and Vanguard Energy

Assuming the 90 days horizon Tiaa-cref Bond is expected to generate 4.41 times less return on investment than Vanguard Energy. But when comparing it to its historical volatility, Tiaa Cref Bond Fund is 2.19 times less risky than Vanguard Energy. It trades about 0.09 of its potential returns per unit of risk. Vanguard Energy Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,531  in Vanguard Energy Fund on May 3, 2025 and sell it today you would earn a total of  300.00  from holding Vanguard Energy Fund or generate 6.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Tiaa Cref Bond Fund  vs.  Vanguard Energy Fund

Tiaa Cref Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Bond Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Tiaa-cref Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Energy Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tiaa-cref Bond and Vanguard Energy

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

The idea behind Tiaa Cref Bond Fund and Vanguard Energy Fund 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.