Correlation Between Massmutual Retiresmart and L Abbett
Can any of the company-specific risk be diversified away by investing in both Massmutual Retiresmart and L Abbett 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 L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Retiresmart 2045 and L Abbett Fundamental, you can compare the effects of market volatilities on Massmutual Retiresmart and L Abbett 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 L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and L Abbett.
Diversification Opportunities for Massmutual Retiresmart and L Abbett
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and LAVVX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart 2045 and L Abbett Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Fundamental 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 2045 are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Fundamental has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and L Abbett go up and down completely randomly.
Pair Corralation between Massmutual Retiresmart and L Abbett
Assuming the 90 days horizon Massmutual Retiresmart 2045 is expected to generate 0.73 times more return on investment than L Abbett. However, Massmutual Retiresmart 2045 is 1.36 times less risky than L Abbett. It trades about 0.21 of its potential returns per unit of risk. L Abbett Fundamental is currently generating about -0.03 per unit of risk. If you would invest 1,173 in Massmutual Retiresmart 2045 on September 14, 2024 and sell it today you would earn a total of 19.00 from holding Massmutual Retiresmart 2045 or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Retiresmart 2045 vs. L Abbett Fundamental
Performance |
| Timeline |
| Massmutual Retiresmart |
| L Abbett Fundamental |
Massmutual Retiresmart and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Retiresmart and L Abbett
The main advantage of trading using opposite Massmutual Retiresmart and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, L Abbett 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 L Abbett will offset losses from the drop in L Abbett's long position.| Massmutual Retiresmart vs. L Abbett Fundamental | Massmutual Retiresmart vs. Commonwealth Global Fund | Massmutual Retiresmart vs. Small Cap Stock | Massmutual Retiresmart vs. Auer Growth Fund |
| L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Focused | L Abbett vs. Floating Rate 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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