Correlation Between Small Cap and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Massmutual Retiresmart 2045, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Massmutual Retiresmart.
Diversification Opportunities for Small Cap and Massmutual Retiresmart
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Massmutual is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Massmutual Retiresmart 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Small Cap and Massmutual Retiresmart
Assuming the 90 days horizon Small Cap Stock is expected to generate 2.03 times more return on investment than Massmutual Retiresmart. However, Small Cap is 2.03 times more volatile than Massmutual Retiresmart 2045. It trades about 0.07 of its potential returns per unit of risk. Massmutual Retiresmart 2045 is currently generating about 0.13 per unit of risk. If you would invest 1,191 in Small Cap Stock on September 14, 2024 and sell it today you would earn a total of 295.00 from holding Small Cap Stock or generate 24.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Massmutual Retiresmart 2045
Performance |
| Timeline |
| Small Cap Stock |
| Massmutual Retiresmart |
Small Cap and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Massmutual Retiresmart
The main advantage of trading using opposite Small Cap and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Guggenheim Managed Futures | Small Cap vs. Simt Multi Asset Inflation | Small Cap vs. Goldman Sachs Inflation | Small Cap vs. Loomis Sayles Inflation |
| Massmutual Retiresmart vs. L Abbett Fundamental | Massmutual Retiresmart vs. Commonwealth Global Fund | Massmutual Retiresmart vs. Small Cap Stock | Massmutual Retiresmart vs. Auer Growth 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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