Correlation Between Oil Gas and Massmutual Retiresmart

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

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

Diversification Opportunities for Oil Gas and Massmutual Retiresmart

0.67

Correlation Coefficient

Oil Gas  Massmutual Retiresmart

Poor diversification

The 3 months correlation between Oil and Massmutual is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Massmutual Retiresmart Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Oil Gas 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 Oil Gas Ultrasector 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 Oil Gas i.e., Oil Gas and Massmutual Retiresmart go up and down completely randomly.

Pair Corralation between Oil Gas and Massmutual Retiresmart

Assuming the 90 days horizon Oil Gas Ultrasector is expected to under-perform the Massmutual Retiresmart. In addition to that, Oil Gas is 4.04 times more volatile than Massmutual Retiresmart Moderate. It trades about -0.01 of its total potential returns per unit of risk. Massmutual Retiresmart Moderate is currently generating about 0.04 per unit of volatility. If you would invest  807.00  in Massmutual Retiresmart Moderate on October 4, 2024 and sell it today you would earn a total of  82.00  from holding Massmutual Retiresmart Moderate or generate 10.16% return on investment over 90 days.

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

Oil Gas Ultrasector  vs.  Massmutual Retiresmart Moderat

Oil Gas Ultrasector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oil Gas Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Massmutual Retiresmart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Retiresmart Moderate 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 Oil Gas and Massmutual Retiresmart

The main advantage of trading using opposite Oil Gas and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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 Oil Gas Ultrasector and Massmutual Retiresmart Moderate 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.