Correlation Between Vanguard 500 and Tiaa Cref
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 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 Vanguard 500 and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Tiaa Cref Social Choice, you can compare the effects of market volatilities on Vanguard 500 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 Vanguard 500 with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Tiaa Cref.
Diversification Opportunities for Vanguard 500 and Tiaa Cref
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Tiaa is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Tiaa Cref Social Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Social and Vanguard 500 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 Vanguard 500 Index 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 Social has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Tiaa Cref go up and down completely randomly.
Pair Corralation between Vanguard 500 and Tiaa Cref
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 0.96 times more return on investment than Tiaa Cref. However, Vanguard 500 Index is 1.05 times less risky than Tiaa Cref. It trades about -0.3 of its potential returns per unit of risk. Tiaa Cref Social Choice is currently generating about -0.36 per unit of risk. If you would invest 25,631 in Vanguard 500 Index on January 20, 2024 and sell it today you would lose (1,106) from holding Vanguard 500 Index or give up 4.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard 500 Index vs. Tiaa Cref Social Choice
Performance |
Timeline |
Vanguard 500 Index |
Tiaa Cref Social |
Vanguard 500 and Tiaa Cref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard 500 and Tiaa Cref
The main advantage of trading using opposite Vanguard 500 and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 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.Vanguard 500 vs. Vanguard Materials Index | Vanguard 500 vs. Vanguard Limited Term Tax Exempt | Vanguard 500 vs. Vanguard Limited Term Tax Exempt | Vanguard 500 vs. Vanguard Global Minimum |
Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets | Tiaa Cref vs. Tiaa Cref Emerging Markets |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |