Correlation Between Tiaa-cref Inflation-linked and Voya Vacs

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

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

Diversification Opportunities for Tiaa-cref Inflation-linked and Voya Vacs

0.74

Correlation Coefficient

Tiaa-cref Inflation-linked  Voya Vacs

Poor diversification

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

Pair Corralation between Tiaa-cref Inflation-linked and Voya Vacs

Assuming the 90 days horizon Tiaa Cref Inflation Linked Bond is expected to generate 0.13 times more return on investment than Voya Vacs. However, Tiaa Cref Inflation Linked Bond is 7.7 times less risky than Voya Vacs. It trades about -0.24 of its potential returns per unit of risk. Voya Vacs Series is currently generating about -0.26 per unit of risk. If you would invest  1,057  in Tiaa Cref Inflation Linked Bond on October 11, 2024 and sell it today you would lose (9.00) from holding Tiaa Cref Inflation Linked Bond or give up 0.85% of portfolio value over 90 days.

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

Tiaa Cref Inflation Linked Bon  vs.  Voya Vacs Series

Tiaa-cref Inflation-linked

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Inflation Linked Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Tiaa-cref Inflation-linked is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Vacs Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Vacs Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Tiaa-cref Inflation-linked and Voya Vacs

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

The idea behind Tiaa Cref Inflation Linked Bond and Voya Vacs Series 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 Transaction History module to view history of all your transactions and understand their impact on performance.