Correlation Between Alger Small and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Alger Small 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 Alger Small and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Small Cap and Massmutual Select T, you can compare the effects of market volatilities on Alger Small 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 Alger Small with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Small and Massmutual Select.
Diversification Opportunities for Alger Small and Massmutual Select
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Massmutual is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alger Small Cap and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Alger Small 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 Alger Small 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 has no effect on the direction of Alger Small i.e., Alger Small and Massmutual Select go up and down completely randomly.
Pair Corralation between Alger Small and Massmutual Select
Assuming the 90 days horizon Alger Small is expected to generate 1.17 times less return on investment than Massmutual Select. In addition to that, Alger Small is 1.95 times more volatile than Massmutual Select T. It trades about 0.06 of its total potential returns per unit of risk. Massmutual Select T is currently generating about 0.13 per unit of volatility. If you would invest 1,237 in Massmutual Select T on August 26, 2024 and sell it today you would earn a total of 450.00 from holding Massmutual Select T or generate 36.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Small Cap vs. Massmutual Select T
Performance |
| Timeline |
| Alger Small Cap |
| Massmutual Select |
Alger Small and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Small and Massmutual Select
The main advantage of trading using opposite Alger Small and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Small 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.| Alger Small vs. Goldman Sachs Large | Alger Small vs. Massmutual Select T | Alger Small vs. Qs Large Cap | Alger Small vs. T Rowe Price |
| Massmutual Select vs. Us Vector Equity | Massmutual Select vs. Artisan Select Equity | Massmutual Select vs. Ms Global Fixed | Massmutual Select vs. Scharf Fund Retail |
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 Stocks Directory module to find actively traded stocks across global markets.
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