Correlation Between Empire State and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Massmutual Select T, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Massmutual Select.
Diversification Opportunities for Empire State and Massmutual Select
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Massmutual is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Massmutual Select go up and down completely randomly.
Pair Corralation between Empire State and Massmutual Select
Given the investment horizon of 90 days Empire State Realty is expected to generate 4.31 times more return on investment than Massmutual Select. However, Empire State is 4.31 times more volatile than Massmutual Select T. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.14 per unit of risk. If you would invest 945.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Empire State Realty or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Empire State Realty vs. Massmutual Select T
Performance |
| Timeline |
| Empire State Realty |
| Massmutual Select |
Empire State and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Massmutual Select
The main advantage of trading using opposite Empire State and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |