Correlation Between Massmutual Retiresmart and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Massmutual Retiresmart and Massmutual Select 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 Massmutual Retiresmart and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Retiresmart 2050 and Massmutual Select Mid, you can compare the effects of market volatilities on Massmutual Retiresmart and Massmutual Select 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 Massmutual Retiresmart with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and Massmutual Select.
Diversification Opportunities for Massmutual Retiresmart and Massmutual Select
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Massmutual is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart 2050 and Massmutual Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and Massmutual Retiresmart 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 Massmutual Retiresmart 2050 are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Mid has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and Massmutual Select go up and down completely randomly.
Pair Corralation between Massmutual Retiresmart and Massmutual Select
Assuming the 90 days horizon Massmutual Retiresmart 2050 is expected to generate 0.73 times more return on investment than Massmutual Select. However, Massmutual Retiresmart 2050 is 1.36 times less risky than Massmutual Select. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select Mid is currently generating about 0.06 per unit of risk. If you would invest 717.00 in Massmutual Retiresmart 2050 on September 3, 2024 and sell it today you would earn a total of 225.00 from holding Massmutual Retiresmart 2050 or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Retiresmart 2050 vs. Massmutual Select Mid
Performance |
| Timeline |
| Massmutual Retiresmart |
| Massmutual Select Mid |
Massmutual Retiresmart and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Retiresmart and Massmutual Select
The main advantage of trading using opposite Massmutual Retiresmart and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, Massmutual Select 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 Select will offset losses from the drop in Massmutual Select's long position.| Massmutual Retiresmart vs. Vanguard Target Retirement | Massmutual Retiresmart vs. American Funds 2050 | Massmutual Retiresmart vs. American Funds 2050 | Massmutual Retiresmart vs. American Funds 2050 |
| Massmutual Select vs. Avantis Large Cap | Massmutual Select vs. Aqr Large Cap | Massmutual Select vs. Vanguard Windsor Fund | Massmutual Select vs. American Mutual 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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