Correlation Between Vanguard Total and Tiaa-cref Social

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

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

Diversification Opportunities for Vanguard Total and Tiaa-cref Social

0.99

Correlation Coefficient

Vanguard Total  Tiaa-cref Social

No risk reduction

The 3 months correlation between Vanguard and Tiaa-cref is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock 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 Total 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 Total Stock are associated (or correlated) with Tiaa-cref Social. 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 Total i.e., Vanguard Total and Tiaa-cref Social go up and down completely randomly.

Pair Corralation between Vanguard Total and Tiaa-cref Social

Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.06 times more return on investment than Tiaa-cref Social. However, Vanguard Total is 1.06 times more volatile than Tiaa Cref Social Choice. It trades about -0.27 of its potential returns per unit of risk. Tiaa Cref Social Choice is currently generating about -0.35 per unit of risk. If you would invest  24,715  in Vanguard Total Stock on January 24, 2024 and sell it today you would lose (999.00) from holding Vanguard Total Stock or give up 4.04% of portfolio value over 90 days.

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

Vanguard Total Stock  vs.  Tiaa Cref Social Choice

Vanguard Total Stock

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total Stock are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Social

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Social Choice are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Tiaa-cref Social is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Total and Tiaa-cref Social

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

The idea behind Vanguard Total Stock and Tiaa Cref Social Choice 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..