Correlation Between College Retirement and Tiaa-cref Lifecycle
Can any of the company-specific risk be diversified away by investing in both College Retirement and Tiaa-cref Lifecycle 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 College Retirement and Tiaa-cref Lifecycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Tiaa Cref Lifecycle Index, you can compare the effects of market volatilities on College Retirement and Tiaa-cref Lifecycle 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 College Retirement with a short position of Tiaa-cref Lifecycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Tiaa-cref Lifecycle.
Diversification Opportunities for College Retirement and Tiaa-cref Lifecycle
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between College and TIAA-CREF is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Tiaa Cref Lifecycle Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle and College Retirement 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 College Retirement Equities are associated (or correlated) with Tiaa-cref Lifecycle. 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 Lifecycle has no effect on the direction of College Retirement i.e., College Retirement and Tiaa-cref Lifecycle go up and down completely randomly.
Pair Corralation between College Retirement and Tiaa-cref Lifecycle
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 1.09 times more return on investment than Tiaa-cref Lifecycle. However, College Retirement is 1.09 times more volatile than Tiaa Cref Lifecycle Index. It trades about 0.36 of its potential returns per unit of risk. Tiaa Cref Lifecycle Index is currently generating about 0.34 per unit of risk. If you would invest 32,149 in College Retirement Equities on April 23, 2025 and sell it today you would earn a total of 5,281 from holding College Retirement Equities or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
College Retirement Equities vs. Tiaa Cref Lifecycle Index
Performance |
| Timeline |
| College Retirement |
| Tiaa Cref Lifecycle |
College Retirement and Tiaa-cref Lifecycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Tiaa-cref Lifecycle
The main advantage of trading using opposite College Retirement and Tiaa-cref Lifecycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Tiaa-cref Lifecycle 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 Lifecycle will offset losses from the drop in Tiaa-cref Lifecycle's long position.| College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
| Tiaa-cref Lifecycle vs. Fpa Queens Road | Tiaa-cref Lifecycle vs. Queens Road Small | Tiaa-cref Lifecycle vs. Heartland Value Plus | Tiaa-cref Lifecycle vs. Pace Smallmedium Value |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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