Correlation Between Vanguard Small and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Massmutual Select 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 Vanguard Small and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Massmutual Select Growth, you can compare the effects of market volatilities on Vanguard Small and Massmutual Select 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 Vanguard Small with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Massmutual Select.
Diversification Opportunities for Vanguard Small and Massmutual Select
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Massmutual is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Massmutual Select Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Growth and Vanguard 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 Vanguard Small Cap Value are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Growth has no effect on the direction of Vanguard Small i.e., Vanguard Small and Massmutual Select go up and down completely randomly.
Pair Corralation between Vanguard Small and Massmutual Select
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 0.58 times more return on investment than Massmutual Select. However, Vanguard Small Cap Value is 1.73 times less risky than Massmutual Select. It trades about 0.06 of its potential returns per unit of risk. Massmutual Select Growth is currently generating about 0.03 per unit of risk. If you would invest 3,652 in Vanguard Small Cap Value on September 12, 2024 and sell it today you would earn a total of 1,398 from holding Vanguard Small Cap Value or generate 38.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Massmutual Select Growth
Performance |
| Timeline |
| Vanguard Small Cap |
| Massmutual Select Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Small and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Massmutual Select
The main advantage of trading using opposite Vanguard Small and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Massmutual Select 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 Select will offset losses from the drop in Massmutual Select's long position.| Vanguard Small vs. Jp Morgan Smartretirement | Vanguard Small vs. Sa Worldwide Moderate | Vanguard Small vs. Fidelity Managed Retirement | Vanguard Small vs. Qs Moderate Growth |
| Massmutual Select vs. Angel Oak Financial | Massmutual Select vs. Goldman Sachs Financial | Massmutual Select vs. John Hancock Financial | Massmutual Select vs. 1919 Financial Services |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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