Money Market Correlations

Summary

TOTXX Fund

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The correlation of Money Market is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Money Market Correlation With Market

Significant diversification

The correlation between Money Market Obligations and DJI is 0.03 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Money Market Obligations and DJI in the same portfolio, assuming nothing else is changed.

Check out World Market Map to better understand how to build diversified portfolios. Also, note that the market value of any money market fund could be closely tied with the direction of predictive economic indicators such as signals in interest.

Moving together with Money Money Market Fund

0.95	PFHCX	Pacific Funds Small	Pair Corr
0.73	BA	Boeing Fiscal Year End 29th of January 2025	Pair Corr

Moving against Money Money Market Fund

0.76	VFFSX	Vanguard 500 Index	Pair Corr
0.75	VFIAX	Vanguard 500 Index	Pair Corr
0.75	VFINX	Vanguard 500 Index	Pair Corr
0.74	VTSAX	Vanguard Total Stock	Pair Corr
0.74	VTSMX	Vanguard Total Stock	Pair Corr
0.74	VITSX	Vanguard Total Stock	Pair Corr
0.74	VSTSX	Vanguard Total Stock	Pair Corr
0.74	VSMPX	Vanguard Total Stock	Pair Corr
0.88	CAT	Caterpillar Fiscal Year End 3rd of February 2025	Pair Corr
0.86	HD	Home Depot	Pair Corr
0.74	CSCO	Cisco Systems Aggressive Push	Pair Corr
0.7	GE	GE Aerospace Fiscal Year End 28th of January 2025	Pair Corr
0.68	HPQ	HP Inc	Pair Corr
0.63	IBM	International Business Fiscal Year End 22nd of January 2025	Pair Corr
0.62	XOM	Exxon Mobil Corp Fiscal Year End 7th of February 2025	Pair Corr
0.57	MCD	McDonalds Fiscal Year End 3rd of February 2025	Pair Corr
0.53	DIS	Walt Disney Aggressive Push	Pair Corr
0.48	BAC	Bank of America Aggressive Push	Pair Corr
0.33	MSFT	Microsoft Aggressive Push	Pair Corr

Related Correlations Analysis

	VTSAX	VFIAX	VTSMX	VITSX	VSTSX	VSMPX	VFINX	VFFSX	VGTSX	VTIAX
VTSAX		0.95	1.0	0.96	1.0	1.0	0.95	1.0	-0.18	-0.18	VTSAX
VFIAX	0.95		0.95	1.0	0.95	0.95	1.0	0.96	-0.19	-0.18	VFIAX
VTSMX	1.0	0.95		0.96	1.0	1.0	0.95	1.0	-0.18	-0.18	VTSMX
VITSX	0.96	1.0	0.96		0.96	0.96	1.0	0.96	-0.22	-0.22	VITSX
VSTSX	1.0	0.95	1.0	0.96		1.0	0.95	1.0	-0.18	-0.18	VSTSX
VSMPX	1.0	0.95	1.0	0.96	1.0		0.95	1.0	-0.18	-0.18	VSMPX
VFINX	0.95	1.0	0.95	1.0	0.95	0.95		0.96	-0.19	-0.18	VFINX
VFFSX	1.0	0.96	1.0	0.96	1.0	1.0	0.96		-0.14	-0.14	VFFSX
VGTSX	-0.18	-0.19	-0.18	-0.22	-0.18	-0.18	-0.19	-0.14		1.0	VGTSX
VTIAX	-0.18	-0.18	-0.18	-0.22	-0.18	-0.18	-0.18	-0.14	1.0		VTIAX
	VTSAX	VFIAX	VTSMX	VITSX	VSTSX	VSMPX	VFINX	VFFSX	VGTSX	VTIAX

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

VTSMX	+ 1.0	VTSAX
VSTSX	+ 1.0	VTSAX
VSMPX	+ 1.0	VTSAX
VFFSX	+ 1.0	VTSAX
VITSX	+ 1.0	VFIAX
VFINX	+ 1.0	VFIAX

High negative correlations

VTIAX	- 0.22	VITSX
VGTSX	- 0.22	VITSX
VGTSX	- 0.19	VFINX
VGTSX	- 0.19	VFIAX
VTIAX	- 0.18	VFINX
VTIAX	- 0.18	VSMPX

Risk-Adjusted Indicators

There is a big difference between Money Money Market Fund performing well and Money Market Money Market Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Money Market's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
VTSAX	0.57	0.00	(0.02)	0.12	0.65	(0.60)	1.10	(1.31)	4.11
VFIAX	0.56	0.10	(0.02)	(7.61)	0.65	(0.57)	1.17	(1.31)	3.84
VTSMX	0.57	0.00	(0.02)	0.12	0.65	(0.60)	1.10	(1.31)	4.11
VITSX	0.58	0.12	0.00	17.55	0.64	(0.62)	1.30	(1.31)	4.11
VSTSX	0.57	0.00	(0.02)	0.12	0.65	(0.60)	1.10	(1.31)	4.11
VSMPX	0.57	0.00	(0.02)	0.12	0.65	(0.60)	1.10	(1.30)	4.11
VFINX	0.56	0.10	(0.02)	(7.69)	0.65	(0.58)	1.17	(1.31)	3.84
VFFSX	0.54	(0.01)	(0.03)	0.11	0.66	(0.55)	1.17	(1.31)	3.84
VGTSX	0.61	(0.11)	0.00	(0.12)	0.00	0.00	1.15	(1.56)	4.09
VTIAX	0.61	(0.11)	0.00	(0.12)	0.00	0.00	1.15	(1.59)	4.11

Money Market Related Equities

One of the popular trading techniques among algorithmic traders is to use market-neutral strategies where every trade hedges away some risk. Because there are two separate transactions required, even if one position performs unexpectedly, the other equity can make up some of the losses. Below are some of the equities that can be combined with Money Market money market fund to make a market-neutral strategy. Peer analysis of Money Market could also be used in its relative valuation, which is a method of valuing Money Market by comparing valuation metrics with similar companies.

Vanguard Total Stock Vanguard 500 Index Vanguard Total Stock Vanguard Total Stock Vanguard Total Stock Vanguard Total Stock Vanguard 500 Index Vanguard 500 Index Vanguard Total International Vanguard Total International American Airlines Group Alcoa Corp Apple Inc Best Buy Co Citigroup

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