Correlation Between Massmutual Select and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Fidelity Freedom 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 Select and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select T and Fidelity Freedom Blend, you can compare the effects of market volatilities on Massmutual Select and Fidelity Freedom 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 Select with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Fidelity Freedom.
Diversification Opportunities for Massmutual Select and Fidelity Freedom
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select T and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Massmutual Select 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 Select T are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Blend has no effect on the direction of Massmutual Select i.e., Massmutual Select and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Massmutual Select and Fidelity Freedom
Assuming the 90 days horizon Massmutual Select T is expected to generate 1.01 times more return on investment than Fidelity Freedom. However, Massmutual Select is 1.01 times more volatile than Fidelity Freedom Blend. It trades about 0.31 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.26 per unit of risk. If you would invest 1,868 in Massmutual Select T on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Massmutual Select T or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Massmutual Select T vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Massmutual Select |
| Fidelity Freedom Blend |
Massmutual Select and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Fidelity Freedom
The main advantage of trading using opposite Massmutual Select and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.| Massmutual Select vs. Guggenheim High Yield | Massmutual Select vs. T Rowe Price | Massmutual Select vs. Nuveen High Income | Massmutual Select vs. Victory High Income |
| Fidelity Freedom vs. Fidelity Freedom Blend | Fidelity Freedom vs. Fidelity Freedom Blend | Fidelity Freedom vs. Fidelity Freedom Blend | Fidelity Freedom vs. Fidelity Freedom Blend |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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