Correlation Between Small Cap and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Massmutual Retiresmart 2050, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Massmutual Retiresmart.
Diversification Opportunities for Small Cap and Massmutual Retiresmart
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small and Massmutual is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Massmutual Retiresmart 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Small Cap 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 Small Cap Equity 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 Small Cap i.e., Small Cap and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Small Cap and Massmutual Retiresmart
Assuming the 90 days horizon Small Cap Equity is expected to generate 1.73 times more return on investment than Massmutual Retiresmart. However, Small Cap is 1.73 times more volatile than Massmutual Retiresmart 2050. It trades about 0.07 of its potential returns per unit of risk. Massmutual Retiresmart 2050 is currently generating about 0.09 per unit of risk. If you would invest 1,725 in Small Cap Equity on August 25, 2024 and sell it today you would earn a total of 257.00 from holding Small Cap Equity or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Small Cap Equity vs. Massmutual Retiresmart 2050
Performance |
| Timeline |
| Small Cap Equity |
| Massmutual Retiresmart |
Small Cap and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Massmutual Retiresmart
The main advantage of trading using opposite Small Cap and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Growth Allocation Fund | Small Cap vs. Defensive Market Strategies | Small Cap vs. Defensive Market Strategies | Small Cap vs. Value Equity Institutional |
| Massmutual Retiresmart vs. Small Cap Equity | Massmutual Retiresmart vs. The Hartford Equity | Massmutual Retiresmart vs. Scharf Fund Retail | Massmutual Retiresmart vs. The Hartford Equity |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |