Correlation Between L Abbett and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both L Abbett 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 L Abbett and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Fundamental and Massmutual Retiresmart 2045, you can compare the effects of market volatilities on L Abbett 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 L Abbett with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Massmutual Retiresmart.
Diversification Opportunities for L Abbett and Massmutual Retiresmart
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LAVVX and Massmutual is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Fundamental and Massmutual Retiresmart 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and L Abbett 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 L Abbett Fundamental 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 L Abbett i.e., L Abbett and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between L Abbett and Massmutual Retiresmart
Assuming the 90 days horizon L Abbett Fundamental is expected to generate 1.12 times more return on investment than Massmutual Retiresmart. However, L Abbett is 1.12 times more volatile than Massmutual Retiresmart 2045. It trades about 0.15 of its potential returns per unit of risk. Massmutual Retiresmart 2045 is currently generating about 0.13 per unit of risk. If you would invest 1,196 in L Abbett Fundamental on September 14, 2024 and sell it today you would earn a total of 379.00 from holding L Abbett Fundamental or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Fundamental vs. Massmutual Retiresmart 2045
Performance |
| Timeline |
| L Abbett Fundamental |
| Massmutual Retiresmart |
L Abbett and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Massmutual Retiresmart
The main advantage of trading using opposite L Abbett and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett 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.| L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Focused | L Abbett vs. Floating Rate Fund |
| Massmutual Retiresmart vs. L Abbett Fundamental | Massmutual Retiresmart vs. Commonwealth Global Fund | Massmutual Retiresmart vs. Small Cap Stock | Massmutual Retiresmart vs. Auer Growth Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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