Correlation Between Massmutual Retiresmart and Columbia Real

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

By analyzing existing cross correlation between Massmutual Retiresmart Servative and Columbia Real Estate, you can compare the effects of market volatilities on Massmutual Retiresmart and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Retiresmart and Columbia Real.

Diversification Opportunities for Massmutual Retiresmart and Columbia Real

0.79

Correlation Coefficient

Massmutual Retiresmart  Columbia Real

Poor diversification

The 3 months correlation between Massmutual and Columbia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Retiresmart Servati and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Servative are associated (or correlated) with Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Massmutual Retiresmart i.e., Massmutual Retiresmart and Columbia Real go up and down completely randomly.

Pair Corralation between Massmutual Retiresmart and Columbia Real

Assuming the 90 days horizon Massmutual Retiresmart Servative is expected to generate 0.58 times more return on investment than Columbia Real. However, Massmutual Retiresmart Servative is 1.71 times less risky than Columbia Real. It trades about -0.15 of its potential returns per unit of risk. Columbia Real Estate is currently generating about -0.11 per unit of risk. If you would invest  952.00  in Massmutual Retiresmart Servative on September 29, 2024 and sell it today you would lose (53.00) from holding Massmutual Retiresmart Servative or give up 5.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Massmutual Retiresmart Servati  vs.  Columbia Real Estate

Massmutual Retiresmart

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Retiresmart Servative 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.

Columbia Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Massmutual Retiresmart and Columbia Real

The main advantage of trading using opposite Massmutual Retiresmart and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Retiresmart position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real's long position.

The idea behind Massmutual Retiresmart Servative and Columbia Real Estate 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.