Correlation Between Pro Blend and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Pro Blend and Massmutual Retiresmart 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 Pro Blend and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Massmutual Retiresmart 2025, you can compare the effects of market volatilities on Pro Blend and Massmutual Retiresmart 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 Pro Blend with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Blend and Massmutual Retiresmart.
Diversification Opportunities for Pro Blend and Massmutual Retiresmart
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pro and Massmutual is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Massmutual Retiresmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Pro Blend 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 Pro Blend Moderate Term are associated (or correlated) with Massmutual Retiresmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Retiresmart has no effect on the direction of Pro Blend i.e., Pro Blend and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Pro Blend and Massmutual Retiresmart
Assuming the 90 days horizon Pro Blend Moderate Term is expected to generate 1.25 times more return on investment than Massmutual Retiresmart. However, Pro Blend is 1.25 times more volatile than Massmutual Retiresmart 2025. It trades about 0.24 of its potential returns per unit of risk. Massmutual Retiresmart 2025 is currently generating about 0.25 per unit of risk. If you would invest 1,481 in Pro Blend Moderate Term on September 14, 2024 and sell it today you would earn a total of 24.00 from holding Pro Blend Moderate Term or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Massmutual Retiresmart 2025
Performance |
| Timeline |
| Pro Blend Moderate |
| Massmutual Retiresmart |
Pro Blend and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Blend and Massmutual Retiresmart
The main advantage of trading using opposite Pro Blend and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Blend position performs unexpectedly, Massmutual Retiresmart 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 Massmutual Retiresmart will offset losses from the drop in Massmutual Retiresmart's long position.| Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Pro Blend Extended Term |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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