Correlation Between Nebraska Municipal and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal 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 Nebraska Municipal and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Massmutual Retiresmart Growth, you can compare the effects of market volatilities on Nebraska Municipal 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 Nebraska Municipal with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Massmutual Retiresmart.
Diversification Opportunities for Nebraska Municipal and Massmutual Retiresmart
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEBRASKA and Massmutual is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Massmutual Retiresmart Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Nebraska Municipal 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 Nebraska Municipal Fund 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 Nebraska Municipal i.e., Nebraska Municipal and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Massmutual Retiresmart
Assuming the 90 days horizon Nebraska Municipal Fund is expected to generate 0.69 times more return on investment than Massmutual Retiresmart. However, Nebraska Municipal Fund is 1.45 times less risky than Massmutual Retiresmart. It trades about 0.25 of its potential returns per unit of risk. Massmutual Retiresmart Growth is currently generating about 0.16 per unit of risk. If you would invest 923.00 in Nebraska Municipal Fund on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Nebraska Municipal Fund or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Massmutual Retiresmart Growth
Performance |
| Timeline |
| Nebraska Municipal |
| Massmutual Retiresmart |
Nebraska Municipal and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Massmutual Retiresmart
The main advantage of trading using opposite Nebraska Municipal and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal 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.| Nebraska Municipal vs. Viking Tax Free Fund | Nebraska Municipal vs. Viking Tax Free Fund | Nebraska Municipal vs. Integrity Dividend Summit | Nebraska Municipal vs. Integrity Dividend Summit |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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