Correlation Between Short Duration and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Short Duration 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 Short Duration and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Duration Inflation and Massmutual Select Blue, you can compare the effects of market volatilities on Short Duration 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 Short Duration with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and Massmutual Select.
Diversification Opportunities for Short Duration and Massmutual Select
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Short and Massmutual is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation 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 Short Duration 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 Short Duration Inflation 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 Short Duration i.e., Short Duration and Massmutual Select go up and down completely randomly.
Pair Corralation between Short Duration and Massmutual Select
Assuming the 90 days horizon Short Duration is expected to generate 5.45 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Short Duration Inflation is 7.34 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 of returns per unit of risk over similar time horizon. If you would invest 1,532 in Massmutual Select Blue on September 14, 2024 and sell it today you would earn a total of 777.00 from holding Massmutual Select Blue or generate 50.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Duration Inflation vs. Massmutual Select Blue
Performance |
| Timeline |
| Short Duration Inflation |
| Massmutual Select Blue |
Short Duration and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Duration and Massmutual Select
The main advantage of trading using opposite Short Duration and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Duration 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.| Short Duration vs. Needham Aggressive Growth | Short Duration vs. Franklin Growth Opportunities | Short Duration vs. T Rowe Price | Short Duration vs. L Abbett Growth |
| Massmutual Select vs. Ab Bond Inflation | Massmutual Select vs. Deutsche Global Inflation | Massmutual Select vs. Lord Abbett Inflation | Massmutual Select vs. Short Duration Inflation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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