Correlation Between Financials Ultrasector and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Financials Ultrasector 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 Financials Ultrasector and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financials Ultrasector Profund and Massmutual Select T, you can compare the effects of market volatilities on Financials Ultrasector 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 Financials Ultrasector with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financials Ultrasector and Massmutual Select.
Diversification Opportunities for Financials Ultrasector and Massmutual Select
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Financials and Massmutual is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Financials Ultrasector Profund and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Financials Ultrasector 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 Financials Ultrasector Profund 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 Financials Ultrasector i.e., Financials Ultrasector and Massmutual Select go up and down completely randomly.
Pair Corralation between Financials Ultrasector and Massmutual Select
Assuming the 90 days horizon Financials Ultrasector Profund is expected to under-perform the Massmutual Select. In addition to that, Financials Ultrasector is 1.18 times more volatile than Massmutual Select T. It trades about -0.02 of its total potential returns per unit of risk. Massmutual Select T is currently generating about 0.06 per unit of volatility. If you would invest 1,465 in Massmutual Select T on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Massmutual Select T or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financials Ultrasector Profund vs. Massmutual Select T
Performance |
| Timeline |
| Financials Ultrasector |
| Massmutual Select |
Financials Ultrasector and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financials Ultrasector and Massmutual Select
The main advantage of trading using opposite Financials Ultrasector and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financials Ultrasector 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.| Financials Ultrasector vs. Dodge International Stock | Financials Ultrasector vs. Scharf Fund Retail | Financials Ultrasector vs. Gmo Global Equity | Financials Ultrasector vs. Sarofim Equity |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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