Correlation Between Large Cap and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Large Cap 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 Large Cap and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Massmutual Select T, you can compare the effects of market volatilities on Large Cap 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 Large Cap with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Massmutual Select.
Diversification Opportunities for Large Cap and Massmutual Select
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Large and Massmutual is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Large Cap 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 Large Cap Growth Profund 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 Large Cap i.e., Large Cap and Massmutual Select go up and down completely randomly.
Pair Corralation between Large Cap and Massmutual Select
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 1.7 times more return on investment than Massmutual Select. However, Large Cap is 1.7 times more volatile than Massmutual Select T. It trades about 0.1 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.11 per unit of risk. If you would invest 3,940 in Large Cap Growth Profund on September 2, 2024 and sell it today you would earn a total of 581.00 from holding Large Cap Growth Profund or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Massmutual Select T
Performance |
| Timeline |
| Large Cap Growth |
| Massmutual Select |
Large Cap and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Massmutual Select
The main advantage of trading using opposite Large Cap and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap 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.| Large Cap vs. Short Real Estate | Large Cap vs. Ultrashort Mid Cap Profund | Large Cap vs. Technology Ultrasector Profund | Large Cap vs. Technology Ultrasector Profund |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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