Correlation Between Vanguard Index and TIAA Real

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Vanguard Index and TIAA Real 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 Index and TIAA Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Index Trust and TIAA Real Estate, you can compare the effects of market volatilities on Vanguard Index and TIAA Real 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 Index with a short position of TIAA Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Index and TIAA Real.

Diversification Opportunities for Vanguard Index and TIAA Real

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vanguard and QREARX is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Index Trust and TIAA Real Estate Account in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIAA Real Estate and Vanguard Index 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 Index Trust are associated (or correlated) with TIAA Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIAA Real Estate has no effect on the direction of Vanguard Index i.e., Vanguard Index and TIAA Real go up and down completely randomly.

Pair Corralation between Vanguard Index and TIAA Real

Assuming the 90 days horizon Vanguard Index Trust is expected to under-perform the TIAA Real. In addition to that, Vanguard Index is 31.23 times more volatile than TIAA Real Estate. It trades about -0.13 of its total potential returns per unit of risk. TIAA Real Estate is currently generating about 0.37 per unit of volatility. If you would invest  56,513  in TIAA Real Estate on March 31, 2022 and sell it today you would earn a total of  261.00  from holding TIAA Real Estate or generate 0.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Vanguard Index Trust  vs.  TIAA Real Estate Account

 Performance (%) 
      Timeline 
Vanguard Index Trust 
Vanguard Performance
0 of 100
Over the last 90 days Vanguard Index Trust 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 basic indicators remain fairly strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Vanguard Price Channel

TIAA Real Estate 
QREARX Performance
48 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TIAA Real Estate are ranked lower than 48 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, TIAA Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

QREARX Price Channel

Vanguard Index and TIAA Real Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Vanguard Index and TIAA Real

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

Vanguard Index Trust

Pair trading matchups for Vanguard Index

Pacific Gas vs. Vanguard Index
Kroger vs. Vanguard Index
American Manganese vs. Vanguard Index
Star Bulk vs. Vanguard Index
Geely Automobile vs. Vanguard Index
U S vs. Vanguard Index
Genie Energy vs. Vanguard Index
Walgreens Boots vs. Vanguard Index
TOURMALINE OIL vs. Vanguard Index
Gran Tierra vs. Vanguard Index
Radian vs. Vanguard Index
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Vanguard Index as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Vanguard Index's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Vanguard Index's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Vanguard Index Trust.
The idea behind Vanguard Index Trust and TIAA Real Estate 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.

TIAA Real Estate

Pair trading matchups for TIAA Real

Valhi vs. TIAA Real
Kroger vs. TIAA Real
Daqo New vs. TIAA Real
Mesabi Trust vs. TIAA Real
American Manganese vs. TIAA Real
TOURMALINE OIL vs. TIAA Real
Genie Energy vs. TIAA Real
Walgreens Boots vs. TIAA Real
Gran Tierra vs. TIAA Real
Star Bulk vs. TIAA Real
Pacific Gas vs. TIAA Real
Stealthgas vs. TIAA Real
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against TIAA Real as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. TIAA Real's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, TIAA Real's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to TIAA Real Estate.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go