Correlation Between Multisector Bond and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Massmutual Select Blue, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Massmutual Select.
Diversification Opportunities for Multisector Bond and Massmutual Select
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multisector and Massmutual is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and Multisector Bond 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 Multisector Bond Sma 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 Blue has no effect on the direction of Multisector Bond i.e., Multisector Bond and Massmutual Select go up and down completely randomly.
Pair Corralation between Multisector Bond and Massmutual Select
Assuming the 90 days horizon Multisector Bond is expected to generate 3.15 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Multisector Bond Sma is 3.41 times less risky than Massmutual Select. It trades about 0.4 of its potential returns per unit of risk. Massmutual Select Blue is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,835 in Massmutual Select Blue on September 4, 2024 and sell it today you would earn a total of 138.00 from holding Massmutual Select Blue or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Multisector Bond Sma vs. Massmutual Select Blue
Performance |
| Timeline |
| Multisector Bond Sma |
| Massmutual Select Blue |
Multisector Bond and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Massmutual Select
The main advantage of trading using opposite Multisector Bond and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. The National Tax Free | Multisector Bond vs. Artisan High Income | Multisector Bond vs. Versatile Bond Portfolio | Multisector Bond vs. Touchstone Premium Yield |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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