Correlation Between Massmutual Premier and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Washington Mutual 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 Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Diversified and Washington Mutual Investors, you can compare the effects of market volatilities on Massmutual Premier and Washington Mutual 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 Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Washington Mutual.
Diversification Opportunities for Massmutual Premier and Washington Mutual
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Washington is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual 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 Diversified are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Washington Mutual go up and down completely randomly.
Pair Corralation between Massmutual Premier and Washington Mutual
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 0.46 times more return on investment than Washington Mutual. However, Massmutual Premier Diversified is 2.16 times less risky than Washington Mutual. It trades about 0.24 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about -0.01 per unit of risk. If you would invest 815.00 in Massmutual Premier Diversified on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Massmutual Premier Diversified or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Washington Mutual Investors
Performance |
| Timeline |
| Massmutual Premier |
| Washington Mutual |
Massmutual Premier and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Washington Mutual
The main advantage of trading using opposite Massmutual Premier and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.| Massmutual Premier vs. Rationalpier 88 Convertible | Massmutual Premier vs. Lord Abbett Convertible | Massmutual Premier vs. Putnam Convertible Incm Gwth | Massmutual Premier vs. Allianzgi Convertible Income |
| Washington Mutual vs. Massmutual Premier Diversified | Washington Mutual vs. Small Cap Stock | Washington Mutual vs. Sentinel Small Pany | Washington Mutual vs. Davenport Small 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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