Correlation Between Commodities Strategy and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Massmutual Retiresmart 2050, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Massmutual Retiresmart.
Diversification Opportunities for Commodities Strategy and Massmutual Retiresmart
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commodities and Massmutual is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Massmutual Retiresmart 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy i.e., Commodities Strategy and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Commodities Strategy and Massmutual Retiresmart
Assuming the 90 days horizon Commodities Strategy is expected to generate 2.86 times less return on investment than Massmutual Retiresmart. In addition to that, Commodities Strategy is 1.61 times more volatile than Massmutual Retiresmart 2050. It trades about 0.03 of its total potential returns per unit of risk. Massmutual Retiresmart 2050 is currently generating about 0.12 per unit of volatility. If you would invest 788.00 in Massmutual Retiresmart 2050 on September 4, 2024 and sell it today you would earn a total of 169.00 from holding Massmutual Retiresmart 2050 or generate 21.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Massmutual Retiresmart 2050
Performance |
| Timeline |
| Commodities Strategy |
| Massmutual Retiresmart |
Commodities Strategy and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Massmutual Retiresmart
The main advantage of trading using opposite Commodities Strategy and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |