Correlation Between American Funds and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Massmutual Select T, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Massmutual Select.
Diversification Opportunities for American Funds and Massmutual Select
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Massmutual is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and American Funds 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 American Funds 2050 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 American Funds i.e., American Funds and Massmutual Select go up and down completely randomly.
Pair Corralation between American Funds and Massmutual Select
Assuming the 90 days horizon American Funds 2050 is expected to generate 0.75 times more return on investment than Massmutual Select. However, American Funds 2050 is 1.34 times less risky than Massmutual Select. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.03 per unit of risk. If you would invest 1,617 in American Funds 2050 on November 27, 2024 and sell it today you would earn a total of 458.00 from holding American Funds 2050 or generate 28.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2050 vs. Massmutual Select T
Performance |
| Timeline |
| American Funds 2050 |
| Massmutual Select |
American Funds and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Massmutual Select
The main advantage of trading using opposite American Funds and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Barings Global Floating | American Funds vs. Morningstar Global Income | American Funds vs. Ab Global Bond | American Funds vs. Legg Mason Bw |
| Massmutual Select vs. Sprott Gold Equity | Massmutual Select vs. Deutsche Gold Precious | Massmutual Select vs. Gold And Precious | Massmutual Select vs. Oppenheimer Gold Special |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings 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 |