Correlation Between Ab Select and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Massmutual Select Mid Cap, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Massmutual Select.
Diversification Opportunities for Ab Select and Massmutual Select
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASCLX and Massmutual is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort 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 Ab Select 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 Ab Select Longshort 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 Ab Select i.e., Ab Select and Massmutual Select go up and down completely randomly.
Pair Corralation between Ab Select and Massmutual Select
Assuming the 90 days horizon Ab Select is expected to generate 1.07 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Ab Select Longshort is 1.37 times less risky than Massmutual Select. It trades about 0.12 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,197 in Massmutual Select Mid Cap on August 25, 2024 and sell it today you would earn a total of 161.00 from holding Massmutual Select Mid Cap or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| Ab Select Longshort |
| Massmutual Select Mid |
Ab Select and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Massmutual Select
The main advantage of trading using opposite Ab Select and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Baird Smallmid Cap | Ab Select vs. Ab Small Cap | Ab Select vs. Nationwide Small Cap | Ab Select vs. Qs Small Capitalization |
| Massmutual Select vs. Ab Select Longshort | Massmutual Select vs. Calvert Short Duration | Massmutual Select vs. Maryland Short Term Tax Free | Massmutual Select vs. Astor Longshort Fund |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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