Correlation Between Champlain Small and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Champlain Small 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 Champlain Small and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Massmutual Select Blue, you can compare the effects of market volatilities on Champlain Small 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 Champlain Small with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Massmutual Select.
Diversification Opportunities for Champlain Small and Massmutual Select
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Champlain and Massmutual is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and Champlain Small 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 Champlain Small 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 Blue has no effect on the direction of Champlain Small i.e., Champlain Small and Massmutual Select go up and down completely randomly.
Pair Corralation between Champlain Small and Massmutual Select
Assuming the 90 days horizon Champlain Small is expected to generate 1.45 times more return on investment than Massmutual Select. However, Champlain Small is 1.45 times more volatile than Massmutual Select Blue. It trades about 0.31 of its potential returns per unit of risk. Massmutual Select Blue is currently generating about 0.19 per unit of risk. If you would invest 2,286 in Champlain Small on August 25, 2024 and sell it today you would earn a total of 260.00 from holding Champlain Small or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Massmutual Select Blue
Performance |
| Timeline |
| Champlain Small |
| Massmutual Select Blue |
Champlain Small and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Massmutual Select
The main advantage of trading using opposite Champlain Small and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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.| Champlain Small vs. Washington Mutual Investors | Champlain Small vs. Baron Emerging Markets | Champlain Small vs. Aquagold International | Champlain Small vs. Morningstar Unconstrained Allocation |
| Massmutual Select vs. Vanguard Small Cap Index | Massmutual Select vs. Champlain Small | Massmutual Select vs. The Hartford Small | Massmutual Select vs. Small Cap Value |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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