Correlation Between Lifestyle and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Lifestyle 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 Lifestyle and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Massmutual Select Mid, you can compare the effects of market volatilities on Lifestyle 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 Lifestyle with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Massmutual Select.
Diversification Opportunities for Lifestyle and Massmutual Select
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifestyle and Massmutual is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate and Massmutual Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and Lifestyle 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 Lifestyle Ii Moderate 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 Lifestyle i.e., Lifestyle and Massmutual Select go up and down completely randomly.
Pair Corralation between Lifestyle and Massmutual Select
Assuming the 90 days horizon Lifestyle is expected to generate 1.05 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Lifestyle Ii Moderate is 2.25 times less risky than Massmutual Select. It trades about 0.1 of its potential returns per unit of risk. Massmutual Select Mid is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,482 in Massmutual Select Mid on August 29, 2024 and sell it today you would earn a total of 199.00 from holding Massmutual Select Mid or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Massmutual Select Mid
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Massmutual Select Mid |
Lifestyle and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Massmutual Select
The main advantage of trading using opposite Lifestyle and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle 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.| Lifestyle vs. Vanguard Wellesley Income | Lifestyle vs. HUMANA INC | Lifestyle vs. Aquagold International | Lifestyle vs. Barloworld Ltd ADR |
| Massmutual Select vs. Massmutual Select Blue | Massmutual Select vs. Massmutual Select Blue | Massmutual Select vs. Massmutual Select Blue | Massmutual Select vs. Massmutual Premier Short Duration |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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