Correlation Between XRP and Massmutual Premier

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

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

Diversification Opportunities for XRP and Massmutual Premier

0.07

Correlation Coefficient

XRP  Massmutual Premier

Significant diversification

The 3 months correlation between XRP and Massmutual is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Massmutual Premier Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and XRP 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 XRP are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of XRP i.e., XRP and Massmutual Premier go up and down completely randomly.

Pair Corralation between XRP and Massmutual Premier

Assuming the 90 days trading horizon XRP is expected to generate 9.33 times more return on investment than Massmutual Premier. However, XRP is 9.33 times more volatile than Massmutual Premier Balanced. It trades about 0.05 of its potential returns per unit of risk. Massmutual Premier Balanced is currently generating about -0.04 per unit of risk. If you would invest  232.00  in XRP on December 21, 2024 and sell it today you would earn a total of  22.00  from holding XRP or generate 9.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

XRP  vs.  Massmutual Premier Balanced

XRP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, XRP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Massmutual Premier

Risk-Adjusted Performance

Very Weak

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

Pair Trading with XRP and Massmutual Premier

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

The idea behind XRP and Massmutual Premier 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.