Correlation Between Massmutual Premier and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Strategic Allocation 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 Massmutual Premier and Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Balanced and Strategic Allocation Servative, you can compare the effects of market volatilities on Massmutual Premier and Strategic Allocation 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 Massmutual Premier with a short position of Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Strategic Allocation.
Diversification Opportunities for Massmutual Premier and Strategic Allocation
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Massmutual and Strategic is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Balanced and Strategic Allocation Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation and Massmutual Premier 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 Massmutual Premier Balanced are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Strategic Allocation go up and down completely randomly.
Pair Corralation between Massmutual Premier and Strategic Allocation
Assuming the 90 days horizon Massmutual Premier is expected to generate 1.8 times less return on investment than Strategic Allocation. In addition to that, Massmutual Premier is 1.24 times more volatile than Strategic Allocation Servative. It trades about 0.07 of its total potential returns per unit of risk. Strategic Allocation Servative is currently generating about 0.16 per unit of volatility. If you would invest 577.00 in Strategic Allocation Servative on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Strategic Allocation Servative or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Balanced vs. Strategic Allocation Servative
Performance |
| Timeline |
| Massmutual Premier |
| Strategic Allocation |
Massmutual Premier and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Strategic Allocation
The main advantage of trading using opposite Massmutual Premier and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Massmutual Premier vs. Jpmorgan High Yield | Massmutual Premier vs. Pax High Yield | Massmutual Premier vs. Fidelity Capital Income | Massmutual Premier vs. Virtus High Yield |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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