Correlation Between Massmutual Retiresmart and Moderately Aggressive
Can any of the company-specific risk be diversified away by investing in both Massmutual Retiresmart and Moderately Aggressive 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 Massmutual Retiresmart and Moderately Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Retiresmart Moderate and Moderately Aggressive Balanced, you can compare the effects of market volatilities on Massmutual Retiresmart and Moderately Aggressive 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 Massmutual Retiresmart with a short position of Moderately Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and Moderately Aggressive.
Diversification Opportunities for Massmutual Retiresmart and Moderately Aggressive
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Massmutual and Moderately is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart Moderat and Moderately Aggressive Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderately Aggressive and Massmutual Retiresmart 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 Massmutual Retiresmart Moderate are associated (or correlated) with Moderately Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderately Aggressive has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and Moderately Aggressive go up and down completely randomly.
Pair Corralation between Massmutual Retiresmart and Moderately Aggressive
Assuming the 90 days horizon Massmutual Retiresmart is expected to generate 1.14 times less return on investment than Moderately Aggressive. But when comparing it to its historical volatility, Massmutual Retiresmart Moderate is 1.12 times less risky than Moderately Aggressive. It trades about 0.27 of its potential returns per unit of risk. Moderately Aggressive Balanced is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,191 in Moderately Aggressive Balanced on April 22, 2025 and sell it today you would earn a total of 58.00 from holding Moderately Aggressive Balanced or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Retiresmart Moderat vs. Moderately Aggressive Balanced
Performance |
| Timeline |
| Massmutual Retiresmart |
| Moderately Aggressive |
Massmutual Retiresmart and Moderately Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Retiresmart and Moderately Aggressive
The main advantage of trading using opposite Massmutual Retiresmart and Moderately Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, Moderately Aggressive 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 Moderately Aggressive will offset losses from the drop in Moderately Aggressive's long position.The idea behind Massmutual Retiresmart Moderate and Moderately Aggressive Balanced pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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