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 Small and Massmutual Retiresmart 2030, 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
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Massmutual is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Massmutual Retiresmart 2030 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 Small 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 Small is expected to generate 2.6 times more return on investment than Massmutual Retiresmart. However, Massmutual Select is 2.6 times more volatile than Massmutual Retiresmart 2030. It trades about 0.11 of its potential returns per unit of risk. Massmutual Retiresmart 2030 is currently generating about 0.14 per unit of risk. If you would invest 808.00 in Massmutual Select Small on September 4, 2024 and sell it today you would earn a total of 275.00 from holding Massmutual Select Small or generate 34.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Massmutual Select Small vs. Massmutual Retiresmart 2030
Performance |
| Timeline |
| Massmutual Select Small |
| 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. Avantis Large Cap | Massmutual Select vs. Qs Large Cap | Massmutual Select vs. Pace Large Value | Massmutual Select vs. Dana Large Cap |
| Massmutual Retiresmart vs. Virtus High Yield | Massmutual Retiresmart vs. Calvert High Yield | Massmutual Retiresmart vs. Blackrock High Yield | Massmutual Retiresmart vs. Pioneer High Yield |
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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