Correlation Between Bank of America and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Bank of America and Massmutual Premier 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 Bank of America and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Massmutual Premier Short Duration, you can compare the effects of market volatilities on Bank of America and Massmutual Premier 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 Bank of America with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Massmutual Premier.
Diversification Opportunities for Bank of America and Massmutual Premier
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Massmutual is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Massmutual Premier Short Durat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Bank of America 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 Bank of America are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Bank of America i.e., Bank of America and Massmutual Premier go up and down completely randomly.
Pair Corralation between Bank of America and Massmutual Premier
Considering the 90-day investment horizon Bank of America is expected to generate 20.52 times more return on investment than Massmutual Premier. However, Bank of America is 20.52 times more volatile than Massmutual Premier Short Duration. It trades about 0.35 of its potential returns per unit of risk. Massmutual Premier Short Duration is currently generating about 0.11 per unit of risk. If you would invest 4,133 in Bank of America on September 3, 2024 and sell it today you would earn a total of 618.00 from holding Bank of America or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Massmutual Premier Short Durat
Performance |
| Timeline |
| Bank of America |
| Massmutual Premier |
Bank of America and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Massmutual Premier
The main advantage of trading using opposite Bank of America and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Massmutual Premier 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 Premier will offset losses from the drop in Massmutual Premier's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| Massmutual Premier vs. Americafirst Large Cap | Massmutual Premier vs. Qs Large Cap | Massmutual Premier vs. Pace Large Value | Massmutual Premier vs. Transamerica Large Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |