Correlation Between Commonwealth Global and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Commonwealth Global 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 Commonwealth Global and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Global Fund and Massmutual Select Total, you can compare the effects of market volatilities on Commonwealth Global 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 Commonwealth Global with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Global and Massmutual Select.
Diversification Opportunities for Commonwealth Global and Massmutual Select
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Commonwealth and Massmutual is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund and Massmutual Select Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Total and Commonwealth Global 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 Commonwealth Global Fund 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 Total has no effect on the direction of Commonwealth Global i.e., Commonwealth Global and Massmutual Select go up and down completely randomly.
Pair Corralation between Commonwealth Global and Massmutual Select
Assuming the 90 days horizon Commonwealth Global Fund is expected to under-perform the Massmutual Select. In addition to that, Commonwealth Global is 2.21 times more volatile than Massmutual Select Total. It trades about -0.01 of its total potential returns per unit of risk. Massmutual Select Total is currently generating about 0.01 per unit of volatility. If you would invest 823.00 in Massmutual Select Total on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Massmutual Select Total or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Global Fund vs. Massmutual Select Total
Performance |
| Timeline |
| Commonwealth Global |
| Massmutual Select Total |
Commonwealth Global and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Global and Massmutual Select
The main advantage of trading using opposite Commonwealth Global and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Global 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.The idea behind Commonwealth Global Fund and Massmutual Select Total pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Massmutual Select vs. Highland Longshort Healthcare | Massmutual Select vs. Alphacentric Lifesci Healthcare | Massmutual Select vs. Health Care Fund | Massmutual Select vs. Health Care Ultrasector |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |