Correlation Between Multimanager Lifestyle and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Multimanager 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 Multimanager 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 Multimanager Lifestyle Aggressive and Massmutual Select Mid Cap, you can compare the effects of market volatilities on Multimanager 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 Multimanager Lifestyle with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Massmutual Select.
Diversification Opportunities for Multimanager Lifestyle and Massmutual Select
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MULTIMANAGER and Massmutual is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress 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 Multimanager 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 Multimanager Lifestyle Aggressive 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 Multimanager Lifestyle i.e., Multimanager Lifestyle and Massmutual Select go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Massmutual Select
Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 1.49 times less return on investment than Massmutual Select. In addition to that, Multimanager Lifestyle is 1.07 times more volatile than Massmutual Select Mid Cap. It trades about 0.09 of its total potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.14 per unit of volatility. If you would invest 1,208 in Massmutual Select Mid Cap on September 3, 2024 and sell it today you would earn a total of 164.00 from holding Massmutual Select Mid Cap or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| Multimanager Lifestyle |
| Massmutual Select Mid |
Multimanager Lifestyle and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Massmutual Select
The main advantage of trading using opposite Multimanager Lifestyle and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager 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.| Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. American Funds Growth | Multimanager Lifestyle vs. Franklin Mutual Shares | Multimanager Lifestyle vs. Franklin Mutual Shares |
| Massmutual Select vs. Western Asset High | Massmutual Select vs. Pioneer High Yield | Massmutual Select vs. Morningstar Aggressive Growth | Massmutual Select vs. Multimanager Lifestyle Aggressive |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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