Correlation Between Applied Finance and Massmutual Retiresmart

Can any of the company-specific risk be diversified away by investing in both Applied Finance 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 Applied Finance and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Applied Finance Explorer and Massmutual Retiresmart 2025, you can compare the effects of market volatilities on Applied Finance 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 Applied Finance with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Massmutual Retiresmart.

Diversification Opportunities for Applied Finance and Massmutual Retiresmart

0.8

Correlation Coefficient

Applied Finance  Massmutual Retiresmart

Very poor diversification

The 3 months correlation between Applied and Massmutual is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Massmutual Retiresmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Applied Finance 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 Applied Finance Explorer 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 Applied Finance i.e., Applied Finance and Massmutual Retiresmart go up and down completely randomly.

Pair Corralation between Applied Finance and Massmutual Retiresmart

Assuming the 90 days horizon Applied Finance Explorer is expected to generate 2.99 times more return on investment than Massmutual Retiresmart. However, Applied Finance is 2.99 times more volatile than Massmutual Retiresmart 2025. It trades about 0.0 of its potential returns per unit of risk. Massmutual Retiresmart 2025 is currently generating about -0.05 per unit of risk. If you would invest  2,257  in Applied Finance Explorer on October 22, 2024 and sell it today you would lose (2.00) from holding Applied Finance Explorer or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Applied Finance Explorer  vs.  Massmutual Retiresmart 2025

Applied Finance Explorer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Finance Explorer has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Applied Finance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Massmutual Retiresmart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Retiresmart 2025 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Massmutual Retiresmart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Applied Finance and Massmutual Retiresmart

The main advantage of trading using opposite Applied Finance and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance 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.

The idea behind Applied Finance Explorer and Massmutual Retiresmart 2025 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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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.