Correlation Between Vanguard Target and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both Vanguard Target 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 Vanguard Target and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Target Retirement and Massmutual Retiresmart 2045, you can compare the effects of market volatilities on Vanguard Target 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 Vanguard Target with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Massmutual Retiresmart.
Diversification Opportunities for Vanguard Target and Massmutual Retiresmart
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Massmutual is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and Massmutual Retiresmart 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Vanguard Target 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 Target Retirement 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 Vanguard Target i.e., Vanguard Target and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between Vanguard Target and Massmutual Retiresmart
Assuming the 90 days horizon Vanguard Target Retirement is expected to generate 1.02 times more return on investment than Massmutual Retiresmart. However, Vanguard Target is 1.02 times more volatile than Massmutual Retiresmart 2045. It trades about 0.11 of its potential returns per unit of risk. Massmutual Retiresmart 2045 is currently generating about 0.11 per unit of risk. If you would invest 2,854 in Vanguard Target Retirement on September 2, 2024 and sell it today you would earn a total of 264.00 from holding Vanguard Target Retirement or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Massmutual Retiresmart 2045
Performance |
| Timeline |
| Vanguard Target Reti |
| Massmutual Retiresmart |
Vanguard Target and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Massmutual Retiresmart
The main advantage of trading using opposite Vanguard Target and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target 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.| Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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