Correlation Between GM and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Massmutual Select Mid Cap, you can compare the effects of market volatilities on GM 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 GM with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Massmutual Select.
Diversification Opportunities for GM and Massmutual Select
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GM and Massmutual is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Massmutual Select Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and GM 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 General Motors 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 Mid has no effect on the direction of GM i.e., GM and Massmutual Select go up and down completely randomly.
Pair Corralation between GM and Massmutual Select
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.2 times more return on investment than Massmutual Select. However, GM is 2.2 times more volatile than Massmutual Select Mid Cap. It trades about 0.03 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.01 per unit of risk. If you would invest 3,902 in General Motors on November 27, 2024 and sell it today you would earn a total of 755.00 from holding General Motors or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| General Motors |
| Massmutual Select Mid |
GM and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Massmutual Select
The main advantage of trading using opposite GM and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Massmutual Select Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Massmutual Select vs. Texton Property | Massmutual Select vs. Short Real Estate | Massmutual Select vs. Vy Clarion Real | Massmutual Select vs. Forum Real Estate |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |