Correlation Between Visa and Massmutual Retiresmart

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Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Massmutual Retiresmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Massmutual Retiresmart Growth, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Massmutual Retiresmart.

Diversification Opportunities for Visa and Massmutual Retiresmart

VisaMassmutualDiversified AwayVisaMassmutualDiversified Away100%
0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Visa and Massmutual is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Massmutual Retiresmart Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Visa 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 Visa Class A 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 Visa i.e., Visa and Massmutual Retiresmart go up and down completely randomly.

Pair Corralation between Visa and Massmutual Retiresmart

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.83 times more return on investment than Massmutual Retiresmart. However, Visa Class A is 1.2 times less risky than Massmutual Retiresmart. It trades about 0.23 of its potential returns per unit of risk. Massmutual Retiresmart Growth is currently generating about -0.1 per unit of risk. If you would invest  27,226  in Visa Class A on September 24, 2024 and sell it today you would earn a total of  4,545  from holding Visa Class A or generate 16.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Visa Class A  vs.  Massmutual Retiresmart Growth

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15V MRGLX
       Timeline  
Visa Class A 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec280290300310320
Massmutual Retiresmart 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Massmutual Retiresmart Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.81010.210.410.610.811

Visa and Massmutual Retiresmart Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.01-3.0-2.0-0.990.01681.062.133.24.28 0.050.100.150.20
JavaScript chart by amCharts 3.21.15V MRGLX
       Returns  

Pair Trading with Visa and Massmutual Retiresmart

The main advantage of trading using opposite Visa and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A and Massmutual Retiresmart Growth 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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