Correlation Between Massmutual Premier and Gmo Trust
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Gmo Trust 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 Gmo Trust 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 Gmo Trust , you can compare the effects of market volatilities on Massmutual Premier and Gmo Trust 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 Gmo Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Gmo Trust.
Diversification Opportunities for Massmutual Premier and Gmo Trust
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Massmutual and Gmo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Gmo Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Trust 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 Gmo Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Trust has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Gmo Trust go up and down completely randomly.
Pair Corralation between Massmutual Premier and Gmo Trust
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 0.26 times more return on investment than Gmo Trust. However, Massmutual Premier Diversified is 3.84 times less risky than Gmo Trust. It trades about -0.09 of its potential returns per unit of risk. Gmo Trust is currently generating about -0.07 per unit of risk. If you would invest 833.00 in Massmutual Premier Diversified on August 30, 2024 and sell it today you would lose (10.00) from holding Massmutual Premier Diversified or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Gmo Trust
Performance |
| Timeline |
| Massmutual Premier |
| Gmo Trust |
Massmutual Premier and Gmo Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Gmo Trust
The main advantage of trading using opposite Massmutual Premier and Gmo Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Gmo Trust 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 Gmo Trust will offset losses from the drop in Gmo Trust's long position.| Massmutual Premier vs. Pimco Income Fund | Massmutual Premier vs. HUMANA INC | Massmutual Premier vs. Aquagold International | Massmutual Premier vs. Barloworld Ltd ADR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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