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 T, 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
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Massmutual is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Massmutual Select T 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 3.62 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Barings Active Short is 2.4 times less risky than Massmutual Select. It trades about 0.11 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,412 in Massmutual Select T on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Massmutual Select T or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Active Short vs. Massmutual Select T
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. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Massmutual Select vs. T Rowe Price | Massmutual Select vs. Transamerica Funds | Massmutual Select vs. Barings Active Short | Massmutual Select vs. Versatile Bond Portfolio |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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