Correlation Between Tiaa-cref Equity and Flexible Bond

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

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

Diversification Opportunities for Tiaa-cref Equity and Flexible Bond

0.7

Correlation Coefficient

Tiaa-cref Equity  Flexible Bond

Poor diversification

The 3 months correlation between Tiaa-cref and Flexible is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Equity Index and Flexible Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Bond Portfolio and Tiaa-cref Equity 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 Equity Index are associated (or correlated) with Flexible Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Bond Portfolio has no effect on the direction of Tiaa-cref Equity i.e., Tiaa-cref Equity and Flexible Bond go up and down completely randomly.

Pair Corralation between Tiaa-cref Equity and Flexible Bond

Assuming the 90 days horizon Tiaa Cref Equity Index is expected to generate 2.63 times more return on investment than Flexible Bond. However, Tiaa-cref Equity is 2.63 times more volatile than Flexible Bond Portfolio. It trades about 0.25 of its potential returns per unit of risk. Flexible Bond Portfolio is currently generating about 0.09 per unit of risk. If you would invest  3,966  in Tiaa Cref Equity Index on May 2, 2025 and sell it today you would earn a total of  482.00  from holding Tiaa Cref Equity Index or generate 12.15% return on investment over 90 days.

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

Tiaa Cref Equity Index  vs.  Flexible Bond Portfolio

Tiaa Cref Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Equity Index 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 Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Flexible Bond Portfolio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Bond Portfolio are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Flexible Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tiaa-cref Equity and Flexible Bond

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

The idea behind Tiaa Cref Equity Index and Flexible Bond Portfolio 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..