Correlation Between Global Gold and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Massmutual Premier Balanced, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Massmutual Premier.
Diversification Opportunities for Global Gold and Massmutual Premier
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Massmutual is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Massmutual Premier Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Global Gold 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 Global Gold Fund 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 Global Gold i.e., Global Gold and Massmutual Premier go up and down completely randomly.
Pair Corralation between Global Gold and Massmutual Premier
Assuming the 90 days horizon Global Gold Fund is expected to generate 3.48 times more return on investment than Massmutual Premier. However, Global Gold is 3.48 times more volatile than Massmutual Premier Balanced. It trades about 0.04 of its potential returns per unit of risk. Massmutual Premier Balanced is currently generating about 0.11 per unit of risk. If you would invest 967.00 in Global Gold Fund on September 13, 2024 and sell it today you would earn a total of 329.00 from holding Global Gold Fund or generate 34.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Massmutual Premier Balanced
Performance |
| Timeline |
| Global Gold Fund |
| Massmutual Premier |
Global Gold and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Massmutual Premier
The main advantage of trading using opposite Global Gold and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. Equity Growth Fund | Global Gold vs. Income Growth Fund | Global Gold vs. Diversified Bond Fund | Global Gold vs. Emerging Markets Fund |
| Massmutual Premier vs. Global Gold Fund | Massmutual Premier vs. Sprott Gold Equity | Massmutual Premier vs. Invesco Gold Special | Massmutual Premier vs. Vy Goldman Sachs |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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