Correlation Between American Mutual and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both American Mutual 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 American Mutual and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Massmutual Select Blue, you can compare the effects of market volatilities on American Mutual 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 American Mutual with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Massmutual Select.
Diversification Opportunities for American Mutual and Massmutual Select
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Massmutual is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and American Mutual 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 Mutual Fund 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 Blue has no effect on the direction of American Mutual i.e., American Mutual and Massmutual Select go up and down completely randomly.
Pair Corralation between American Mutual and Massmutual Select
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.47 times more return on investment than Massmutual Select. However, American Mutual Fund is 2.12 times less risky than Massmutual Select. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select Blue is currently generating about -0.06 per unit of risk. If you would invest 5,705 in American Mutual Fund on November 27, 2024 and sell it today you would earn a total of 47.00 from holding American Mutual Fund or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Massmutual Select Blue
Performance |
| Timeline |
| American Mutual |
| Massmutual Select Blue |
American Mutual and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Massmutual Select
The main advantage of trading using opposite American Mutual and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual 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.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Massmutual Select vs. Dreyfusstandish Global Fixed | Massmutual Select vs. Gmo High Yield | Massmutual Select vs. Rbc Impact Bond | Massmutual Select vs. T Rowe Price |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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