Correlation Between Barings Active and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Massmutual Select Diversified, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Massmutual Select.
Diversification Opportunities for Barings Active and Massmutual Select
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Massmutual is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Barings Active 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 Barings Active Short 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 has no effect on the direction of Barings Active i.e., Barings Active and Massmutual Select go up and down completely randomly.
Pair Corralation between Barings Active and Massmutual Select
Assuming the 90 days horizon Barings Active is expected to generate 2.23 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Barings Active Short is 4.87 times less risky than Massmutual Select. It trades about 0.17 of its potential returns per unit of risk. Massmutual Select Diversified is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 813.00 in Massmutual Select Diversified on September 14, 2024 and sell it today you would earn a total of 265.00 from holding Massmutual Select Diversified or generate 32.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Massmutual Select Diversified
Performance |
| Timeline |
| Barings Active Short |
| Massmutual Select |
Barings Active and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Massmutual Select
The main advantage of trading using opposite Barings Active and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Champlain Small | Barings Active vs. Franklin Small Cap | Barings Active vs. Touchstone Small Cap | Barings Active vs. Df Dent Small |
| Massmutual Select vs. Barings Active Short | Massmutual Select vs. Prudential Short Duration | Massmutual Select vs. Quantitative Longshort Equity | Massmutual Select vs. Virtus Multi Sector Short |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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