Correlation Between Franklin and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Franklin 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 Franklin and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Massmutual Premier Funds, you can compare the effects of market volatilities on Franklin 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 Franklin with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Massmutual Premier.
Diversification Opportunities for Franklin and Massmutual Premier
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Massmutual is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Massmutual Premier Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier Funds and Franklin 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 Franklin Government Money 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 Funds has no effect on the direction of Franklin i.e., Franklin and Massmutual Premier go up and down completely randomly.
Pair Corralation between Franklin and Massmutual Premier
Assuming the 90 days horizon Franklin is expected to generate 1.7 times less return on investment than Massmutual Premier. But when comparing it to its historical volatility, Franklin Government Money is 11.81 times less risky than Massmutual Premier. It trades about 0.13 of its potential returns per unit of risk. Massmutual Premier Funds is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Massmutual Premier Funds on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Massmutual Premier Funds or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.61% |
| Values | Daily Returns |
Franklin Government Money vs. Massmutual Premier Funds
Performance |
| Timeline |
| Franklin Government Money |
| Massmutual Premier Funds |
Franklin and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Massmutual Premier
The main advantage of trading using opposite Franklin and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin 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.| Franklin vs. Rbb Fund Trust | Franklin vs. Barings Global Floating | Franklin vs. Kinetics Global Fund | Franklin vs. Morgan Stanley Global |
| Massmutual Premier vs. Legg Mason Bw | Massmutual Premier vs. Gmo Equity Allocation | Massmutual Premier vs. Pace Large Growth | Massmutual Premier vs. T Rowe Price |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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