Correlation Between Massmutual Retiresmart and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Massmutual Retiresmart and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Retiresmart Servative and Dodge International Stock, you can compare the effects of market volatilities on Massmutual Retiresmart and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and Dodge Cox.
Diversification Opportunities for Massmutual Retiresmart and Dodge Cox
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Dodge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart Servati and Dodge International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge International Stock 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 Servative are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge International Stock has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and Dodge Cox go up and down completely randomly.
Pair Corralation between Massmutual Retiresmart and Dodge Cox
Assuming the 90 days horizon Massmutual Retiresmart is expected to generate 4.78 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, Massmutual Retiresmart Servative is 2.61 times less risky than Dodge Cox. It trades about 0.18 of its potential returns per unit of risk. Dodge International Stock is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 5,201 in Dodge International Stock on November 27, 2024 and sell it today you would earn a total of 258.00 from holding Dodge International Stock or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Retiresmart Servati vs. Dodge International Stock
Performance |
| Timeline |
| Massmutual Retiresmart |
| Dodge International Stock |
Massmutual Retiresmart and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Retiresmart and Dodge Cox
The main advantage of trading using opposite Massmutual Retiresmart and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Massmutual Retiresmart vs. Jpmorgan Trust I | Massmutual Retiresmart vs. Doubleline Emerging Markets | Massmutual Retiresmart vs. Aig Government Money | Massmutual Retiresmart vs. Franklin Government Money |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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