Correlation Between Aam Select and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Aam Select and Massmutual Premier 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 Aam Select and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Massmutual Premier E, you can compare the effects of market volatilities on Aam Select and Massmutual Premier 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 Aam Select with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Massmutual Premier.
Diversification Opportunities for Aam Select and Massmutual Premier
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aam and Massmutual is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Massmutual Premier E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Aam Select 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 Aam Select Income are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Aam Select i.e., Aam Select and Massmutual Premier go up and down completely randomly.
Pair Corralation between Aam Select and Massmutual Premier
Assuming the 90 days horizon Aam Select is expected to generate 1.48 times less return on investment than Massmutual Premier. In addition to that, Aam Select is 1.07 times more volatile than Massmutual Premier E. It trades about 0.14 of its total potential returns per unit of risk. Massmutual Premier E is currently generating about 0.23 per unit of volatility. If you would invest 886.00 in Massmutual Premier E on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Massmutual Premier E or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aam Select Income vs. Massmutual Premier E
Performance |
| Timeline |
| Aam Select Income |
| Massmutual Premier |
Aam Select and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Massmutual Premier
The main advantage of trading using opposite Aam Select and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Massmutual Premier 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 Premier will offset losses from the drop in Massmutual Premier's long position.| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income |
| Massmutual Premier vs. Massmutual Select Mid | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap |
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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