Correlation Between Touchstone Small and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Touchstone Small 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 Touchstone Small and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Massmutual Retiresmart 2045, you can compare the effects of market volatilities on Touchstone Small 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 Touchstone Small with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Massmutual Retiresmart.
Diversification Opportunities for Touchstone Small and Massmutual Retiresmart
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Massmutual is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Massmutual Retiresmart 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Touchstone Small 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 Touchstone Small Cap 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 Touchstone Small i.e., Touchstone Small and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Touchstone Small and Massmutual Retiresmart
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 1.43 times more return on investment than Massmutual Retiresmart. However, Touchstone Small is 1.43 times more volatile than Massmutual Retiresmart 2045. It trades about 0.29 of its potential returns per unit of risk. Massmutual Retiresmart 2045 is currently generating about -0.03 per unit of risk. If you would invest 3,819 in Touchstone Small Cap on October 24, 2024 and sell it today you would earn a total of 190.00 from holding Touchstone Small Cap or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Massmutual Retiresmart 2045
Performance |
| Timeline |
| Touchstone Small Cap |
| Massmutual Retiresmart |
Touchstone Small and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Massmutual Retiresmart
The main advantage of trading using opposite Touchstone Small and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small 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.| Touchstone Small vs. Touchstone Sands Capital | Touchstone Small vs. Mid Cap Growth | Touchstone Small vs. Mid Cap Growth | Touchstone Small vs. Mid Cap Growth |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |