Correlation Between California High-yield and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both California High-yield 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 California High-yield and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Massmutual Select Small, you can compare the effects of market volatilities on California High-yield 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 California High-yield with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Massmutual Select.
Diversification Opportunities for California High-yield and Massmutual Select
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between California and Massmutual is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small and California High-yield 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 California High Yield Municipal 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 Small has no effect on the direction of California High-yield i.e., California High-yield and Massmutual Select go up and down completely randomly.
Pair Corralation between California High-yield and Massmutual Select
Assuming the 90 days horizon California High Yield Municipal is expected to generate 0.19 times more return on investment than Massmutual Select. However, California High Yield Municipal is 5.16 times less risky than Massmutual Select. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select Small is currently generating about -0.2 per unit of risk. If you would invest 971.00 in California High Yield Municipal on November 27, 2024 and sell it today you would earn a total of 4.00 from holding California High Yield Municipal or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Massmutual Select Small
Performance |
| Timeline |
| California High Yield |
| Massmutual Select Small |
California High-yield and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Massmutual Select
The main advantage of trading using opposite California High-yield and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield 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.| California High-yield vs. Nexpoint Real Estate | California High-yield vs. Nexpoint Real Estate | California High-yield vs. Vanguard Reit Index | California High-yield vs. Fidelity Real Estate |
| Massmutual Select vs. T Rowe Price | Massmutual Select vs. T Rowe Price | Massmutual Select vs. Transamerica Financial Life | Massmutual Select vs. Allianzgi Small Cap Blend |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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