Correlation Between Vanguard Health and Massmutual Retiresmart

Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Health 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 Health Care and Massmutual Retiresmart 2025, you can compare the effects of market volatilities on Vanguard Health 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 Health with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Massmutual Retiresmart.

Diversification Opportunities for Vanguard Health and Massmutual Retiresmart

0.32

Correlation Coefficient

Vanguard Health  Massmutual Retiresmart

Weak diversification

The 3 months correlation between Vanguard and Massmutual is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Massmutual Retiresmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Vanguard Health 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 Health Care 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 Health i.e., Vanguard Health and Massmutual Retiresmart go up and down completely randomly.

Pair Corralation between Vanguard Health and Massmutual Retiresmart

Assuming the 90 days horizon Vanguard Health Care is expected to under-perform the Massmutual Retiresmart. In addition to that, Vanguard Health is 1.0 times more volatile than Massmutual Retiresmart 2025. It trades about -0.27 of its total potential returns per unit of risk. Massmutual Retiresmart 2025 is currently generating about -0.13 per unit of volatility. If you would invest  1,141  in Massmutual Retiresmart 2025 on September 21, 2024 and sell it today you would lose (71.00) from holding Massmutual Retiresmart 2025 or give up 6.22% of portfolio value over 90 days.

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

Vanguard Health Care  vs.  Massmutual Retiresmart 2025

Vanguard Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Health Care 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 fundamental indicators remain fairly strong which may send shares a bit higher in January 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 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 Vanguard Health and Massmutual Retiresmart

The main advantage of trading using opposite Vanguard Health and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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 Vanguard Health Care 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.