Correlation Between Scharf Global and Massmutual Retiresmart

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

By analyzing existing cross correlation between Scharf Global Opportunity and Massmutual Retiresmart 2025, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Massmutual Retiresmart.

Diversification Opportunities for Scharf Global and Massmutual Retiresmart

0.55

Correlation Coefficient

Scharf Global  Massmutual Retiresmart

Very weak diversification

The 3 months correlation between Scharf and Massmutual is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Massmutual Retiresmart 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart and Scharf Global 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 Scharf Global Opportunity 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 Scharf Global i.e., Scharf Global and Massmutual Retiresmart go up and down completely randomly.

Pair Corralation between Scharf Global and Massmutual Retiresmart

Assuming the 90 days horizon Scharf Global Opportunity is expected to generate about the same return on investment as Massmutual Retiresmart 2025. However, Scharf Global is 1.62 times more volatile than Massmutual Retiresmart 2025. It trades about 0.09 of its potential returns per unit of risk. Massmutual Retiresmart 2025 is currently producing about 0.15 per unit of risk. If you would invest  999.00  in Massmutual Retiresmart 2025 on September 14, 2024 and sell it today you would earn a total of  164.00  from holding Massmutual Retiresmart 2025 or generate 16.42% return on investment over 90 days.

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

Scharf Global Opportunity  vs.  Massmutual Retiresmart 2025

Scharf Global Opportunity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Global Opportunity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Scharf Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Massmutual Retiresmart

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Retiresmart 2025 are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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 Scharf Global and Massmutual Retiresmart

The main advantage of trading using opposite Scharf Global and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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 Scharf Global Opportunity 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.