Correlation Between Ancora/thelen Small-mid and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Ancora/thelen Small-mid and Massmutual Select 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 Ancora/thelen Small-mid and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ancorathelen Small Mid Cap and Massmutual Select Small, you can compare the effects of market volatilities on Ancora/thelen Small-mid and Massmutual Select 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 Ancora/thelen Small-mid with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancora/thelen Small-mid and Massmutual Select.
Diversification Opportunities for Ancora/thelen Small-mid and Massmutual Select
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ancora/thelen and MASSMUTUAL is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ancorathelen Small Mid Cap and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small and Ancora/thelen Small-mid 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 Ancorathelen Small Mid Cap are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Small has no effect on the direction of Ancora/thelen Small-mid i.e., Ancora/thelen Small-mid and Massmutual Select go up and down completely randomly.
Pair Corralation between Ancora/thelen Small-mid and Massmutual Select
Assuming the 90 days horizon Ancorathelen Small Mid Cap is expected to generate 0.92 times more return on investment than Massmutual Select. However, Ancorathelen Small Mid Cap is 1.09 times less risky than Massmutual Select. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.06 per unit of risk. If you would invest 1,538 in Ancorathelen Small Mid Cap on August 24, 2024 and sell it today you would earn a total of 702.00 from holding Ancorathelen Small Mid Cap or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ancorathelen Small Mid Cap vs. Massmutual Select Small
Performance |
| Timeline |
| Ancora/thelen Small-mid |
| Massmutual Select Small |
Ancora/thelen Small-mid and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ancora/thelen Small-mid and Massmutual Select
The main advantage of trading using opposite Ancora/thelen Small-mid and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancora/thelen Small-mid position performs unexpectedly, Massmutual Select 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 Select will offset losses from the drop in Massmutual Select's long position.The idea behind Ancorathelen Small Mid Cap and Massmutual Select Small 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.
| Massmutual Select vs. Vanguard Small Cap Growth | Massmutual Select vs. Vanguard Small Cap Growth | Massmutual Select vs. Vanguard Explorer Fund | Massmutual Select vs. Vanguard Explorer Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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