Correlation Between Massmutual Select and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Massmutual Select 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 Massmutual Select and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Mid and Massmutual Retiresmart Moderate, you can compare the effects of market volatilities on Massmutual Select 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 Massmutual Select with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Massmutual Retiresmart.
Diversification Opportunities for Massmutual Select and Massmutual Retiresmart
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Massmutual is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid and Massmutual Retiresmart Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart 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 Mid 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 Massmutual Select i.e., Massmutual Select and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Massmutual Select and Massmutual Retiresmart
Assuming the 90 days horizon Massmutual Select Mid is expected to generate 2.02 times more return on investment than Massmutual Retiresmart. However, Massmutual Select is 2.02 times more volatile than Massmutual Retiresmart Moderate. It trades about 0.2 of its potential returns per unit of risk. Massmutual Retiresmart Moderate is currently generating about 0.13 per unit of risk. If you would invest 1,784 in Massmutual Select Mid on September 2, 2024 and sell it today you would earn a total of 189.00 from holding Massmutual Select Mid or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Mid vs. Massmutual Retiresmart Moderat
Performance |
| Timeline |
| Massmutual Select Mid |
| Massmutual Retiresmart |
Massmutual Select and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Massmutual Retiresmart
The main advantage of trading using opposite Massmutual Select and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select 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.| Massmutual Select vs. Artisan Small Cap | Massmutual Select vs. Ab Small Cap | Massmutual Select vs. The Hartford Small | Massmutual Select vs. Jpmorgan Small Cap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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