Correlation Between Artisan High and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Artisan High 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 Artisan High and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan High Income and Massmutual Select Mid Cap, you can compare the effects of market volatilities on Artisan High 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 Artisan High with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Massmutual Select.
Diversification Opportunities for Artisan High and Massmutual Select
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and Massmutual is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Massmutual Select Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and Artisan High 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 Artisan High Income 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 Mid has no effect on the direction of Artisan High i.e., Artisan High and Massmutual Select go up and down completely randomly.
Pair Corralation between Artisan High and Massmutual Select
Assuming the 90 days horizon Artisan High is expected to generate 1.33 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Artisan High Income is 3.05 times less risky than Massmutual Select. It trades about 0.2 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,092 in Massmutual Select Mid Cap on September 12, 2024 and sell it today you would earn a total of 243.00 from holding Massmutual Select Mid Cap or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.7% |
| Values | Daily Returns |
Artisan High Income vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| Artisan High Income |
| Massmutual Select Mid |
Artisan High and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan High and Massmutual Select
The main advantage of trading using opposite Artisan High and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan High 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.| Artisan High vs. Vanguard High Yield Corporate | Artisan High vs. Vanguard High Yield Porate | Artisan High vs. Blackrock Hi Yld | Artisan High vs. Blackrock High Yield |
| Massmutual Select vs. Voya High Yield | Massmutual Select vs. Alpine High Yield | Massmutual Select vs. Artisan High Income | Massmutual Select vs. Gmo High Yield |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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