Correlation Between Massmutual Premier and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Templeton Growth 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 Templeton Growth 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 Templeton Growth Fund, you can compare the effects of market volatilities on Massmutual Premier and Templeton Growth 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Templeton Growth.
Diversification Opportunities for Massmutual Premier and Templeton Growth
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Templeton is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Templeton Growth go up and down completely randomly.
Pair Corralation between Massmutual Premier and Templeton Growth
Assuming the 90 days horizon Massmutual Premier is expected to generate 336.8 times less return on investment than Templeton Growth. But when comparing it to its historical volatility, Massmutual Premier Diversified is 2.11 times less risky than Templeton Growth. It trades about 0.0 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,622 in Templeton Growth Fund on October 20, 2024 and sell it today you would earn a total of 84.00 from holding Templeton Growth Fund or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Templeton Growth Fund
Performance |
| Timeline |
| Massmutual Premier |
| Templeton Growth |
Massmutual Premier and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Templeton Growth
The main advantage of trading using opposite Massmutual Premier and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Massmutual Premier vs. Artisan Select Equity | Massmutual Premier vs. Old Westbury Fixed | Massmutual Premier vs. Gmo Global Equity | Massmutual Premier vs. Quantitative Longshort Equity |
| Templeton Growth vs. Rbc Short Duration | Templeton Growth vs. Short Term Bond Fund | Templeton Growth vs. Ultra Short Fixed Income | Templeton Growth vs. Alpine Ultra Short |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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