Correlation Between Secured Options and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Secured Options 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 Secured Options and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secured Options Portfolio and Massmutual Select Diversified, you can compare the effects of market volatilities on Secured Options 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 Secured Options with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secured Options and Massmutual Select.
Diversification Opportunities for Secured Options and Massmutual Select
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Secured and Massmutual is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Secured Options Portfolio and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Secured Options 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 Secured Options Portfolio 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 Secured Options i.e., Secured Options and Massmutual Select go up and down completely randomly.
Pair Corralation between Secured Options and Massmutual Select
Assuming the 90 days horizon Secured Options Portfolio is expected to generate 0.17 times more return on investment than Massmutual Select. However, Secured Options Portfolio is 5.82 times less risky than Massmutual Select. It trades about 0.57 of its potential returns per unit of risk. Massmutual Select Diversified is currently generating about -0.13 per unit of risk. If you would invest 1,544 in Secured Options Portfolio on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Secured Options Portfolio or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Secured Options Portfolio vs. Massmutual Select Diversified
Performance |
| Timeline |
| Secured Options Portfolio |
| Massmutual Select |
Secured Options and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secured Options and Massmutual Select
The main advantage of trading using opposite Secured Options and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secured Options 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.| Secured Options vs. Artisan High Income | Secured Options vs. Ambrus Core Bond | Secured Options vs. Multisector Bond Sma | Secured Options vs. Franklin High Yield |
| Massmutual Select vs. Origin Emerging Markets | Massmutual Select vs. Ashmore Emerging Markets | Massmutual Select vs. Investec Emerging Markets | Massmutual Select vs. Dws Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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