Correlation Between American Beacon and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ark and Massmutual Premier Global, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Massmutual Premier.
Diversification Opportunities for American Beacon and Massmutual Premier
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Massmutual is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ark and Massmutual Premier Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier Global and American Beacon 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 American Beacon Ark 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 Global has no effect on the direction of American Beacon i.e., American Beacon and Massmutual Premier go up and down completely randomly.
Pair Corralation between American Beacon and Massmutual Premier
Assuming the 90 days horizon American Beacon Ark is expected to under-perform the Massmutual Premier. In addition to that, American Beacon is 3.0 times more volatile than Massmutual Premier Global. It trades about -0.14 of its total potential returns per unit of risk. Massmutual Premier Global is currently generating about -0.06 per unit of volatility. If you would invest 1,012 in Massmutual Premier Global on November 28, 2024 and sell it today you would lose (11.00) from holding Massmutual Premier Global or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Ark vs. Massmutual Premier Global
Performance |
| Timeline |
| American Beacon Ark |
| Massmutual Premier Global |
American Beacon and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Massmutual Premier
The main advantage of trading using opposite American Beacon and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. Mesirow Financial High | American Beacon vs. Intal High Relative | American Beacon vs. Pace High Yield | American Beacon vs. Alpine High Yield |
| Massmutual Premier vs. Massmutual Select Total | Massmutual Premier vs. Massmutual Select Total | Massmutual Premier vs. Massmutual Select Total | Massmutual Premier vs. Massmutual Select Total |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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