Correlation Between Amazon and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Massmutual Select Diversified, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Massmutual Select.
Diversification Opportunities for Amazon and Massmutual Select
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and MASSMUTUAL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Amazon 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 Amazon Inc 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 has no effect on the direction of Amazon i.e., Amazon and Massmutual Select go up and down completely randomly.
Pair Corralation between Amazon and Massmutual Select
Given the investment horizon of 90 days Amazon Inc is expected to generate 0.93 times more return on investment than Massmutual Select. However, Amazon Inc is 1.08 times less risky than Massmutual Select. It trades about 0.05 of its potential returns per unit of risk. Massmutual Select Diversified is currently generating about -0.02 per unit of risk. If you would invest 18,870 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 1,919 from holding Amazon Inc or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Massmutual Select Diversified
Performance |
| Timeline |
| Amazon Inc |
| Massmutual Select |
Amazon and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Massmutual Select
The main advantage of trading using opposite Amazon and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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 Amazon Inc and Massmutual Select Diversified 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 Value Index | Massmutual Select vs. Dodge Cox Stock | Massmutual Select vs. American Funds American | Massmutual Select vs. American Funds American |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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