Correlation Between Massmutual Retiresmart and Ab Small
Can any of the company-specific risk be diversified away by investing in both Massmutual Retiresmart and Ab Small 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 Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Retiresmart 2035 and Ab Small Cap, you can compare the effects of market volatilities on Massmutual Retiresmart and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and Ab Small.
Diversification Opportunities for Massmutual Retiresmart and Ab Small
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and SCYVX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart 2035 and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 2035 are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and Ab Small go up and down completely randomly.
Pair Corralation between Massmutual Retiresmart and Ab Small
Assuming the 90 days horizon Massmutual Retiresmart is expected to generate 1.3 times less return on investment than Ab Small. But when comparing it to its historical volatility, Massmutual Retiresmart 2035 is 2.25 times less risky than Ab Small. It trades about 0.11 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Ab Small Cap on September 12, 2024 and sell it today you would earn a total of 352.00 from holding Ab Small Cap or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Retiresmart 2035 vs. Ab Small Cap
Performance |
| Timeline |
| Massmutual Retiresmart |
| Ab Small Cap |
Massmutual Retiresmart and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Retiresmart and Ab Small
The main advantage of trading using opposite Massmutual Retiresmart and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.| Massmutual Retiresmart vs. Ab Small Cap | Massmutual Retiresmart vs. Siit Small Mid | Massmutual Retiresmart vs. Kinetics Small Cap | Massmutual Retiresmart vs. Touchstone Small Cap |
| Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Vanguard Small Cap Value | Ab Small vs. Us Small Cap | Ab Small vs. Us Targeted Value |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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