Correlation Between Multisector Bond and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Massmutual Premier 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 Premier 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 Premier Global, you can compare the effects of market volatilities on Multisector Bond and Massmutual Premier 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 Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Massmutual Premier.
Diversification Opportunities for Multisector Bond and Massmutual Premier
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Multisector and Massmutual is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Massmutual Premier Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier Global 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier Global has no effect on the direction of Multisector Bond i.e., Multisector Bond and Massmutual Premier go up and down completely randomly.
Pair Corralation between Multisector Bond and Massmutual Premier
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.17 times more return on investment than Massmutual Premier. However, Multisector Bond Sma is 5.93 times less risky than Massmutual Premier. It trades about 0.11 of its potential returns per unit of risk. Massmutual Premier Global is currently generating about 0.01 per unit of risk. If you would invest 1,315 in Multisector Bond Sma on November 3, 2024 and sell it today you would earn a total of 48.00 from holding Multisector Bond Sma or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Massmutual Premier Global
Performance |
| Timeline |
| Multisector Bond Sma |
| Massmutual Premier Global |
Multisector Bond and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Massmutual Premier
The main advantage of trading using opposite Multisector Bond and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Massmutual Premier 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 Premier will offset losses from the drop in Massmutual Premier's long position.| Multisector Bond vs. Jpmorgan High Yield | Multisector Bond vs. Artisan High Income | Multisector Bond vs. Msift High Yield | Multisector Bond vs. Federated High Yield |
| Massmutual Premier vs. Commodities Strategy Fund | Massmutual Premier vs. Angel Oak Multi Strategy | Massmutual Premier vs. Ashmore Emerging Markets | Massmutual Premier vs. Nasdaq 100 2x Strategy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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