Correlation Between Massmutual Select and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Scharf Global 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 Select and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Blue and Scharf Global Opportunity, you can compare the effects of market volatilities on Massmutual Select and Scharf Global 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 Select with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Scharf Global.
Diversification Opportunities for Massmutual Select and Scharf Global
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Massmutual and Scharf is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Blue and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and Massmutual Select 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 Select Blue are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Massmutual Select i.e., Massmutual Select and Scharf Global go up and down completely randomly.
Pair Corralation between Massmutual Select and Scharf Global
Assuming the 90 days horizon Massmutual Select Blue is expected to generate 1.61 times more return on investment than Scharf Global. However, Massmutual Select is 1.61 times more volatile than Scharf Global Opportunity. It trades about 0.19 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.21 per unit of risk. If you would invest 2,258 in Massmutual Select Blue on August 29, 2024 and sell it today you would earn a total of 106.00 from holding Massmutual Select Blue or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Blue vs. Scharf Global Opportunity
Performance |
| Timeline |
| Massmutual Select Blue |
| Scharf Global Opportunity |
Massmutual Select and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Scharf Global
The main advantage of trading using opposite Massmutual Select and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Massmutual Select vs. Scharf Global Opportunity | Massmutual Select vs. Abr 7525 Volatility | Massmutual Select vs. Iaadx | Massmutual Select vs. Fa 529 Aggressive |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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