Correlation Between Massmutual Premier and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Kensington Active 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 Kensington Active 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 Kensington Active Advantage, you can compare the effects of market volatilities on Massmutual Premier and Kensington Active 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 Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Kensington Active.
Diversification Opportunities for Massmutual Premier and Kensington Active
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Massmutual and Kensington is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active 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 Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Kensington Active go up and down completely randomly.
Pair Corralation between Massmutual Premier and Kensington Active
Assuming the 90 days horizon Massmutual Premier is expected to generate 2.1 times less return on investment than Kensington Active. But when comparing it to its historical volatility, Massmutual Premier Diversified is 1.26 times less risky than Kensington Active. It trades about 0.21 of its potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Kensington Active Advantage on September 2, 2024 and sell it today you would earn a total of 31.00 from holding Kensington Active Advantage or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Kensington Active Advantage
Performance |
| Timeline |
| Massmutual Premier |
| Kensington Active |
Massmutual Premier and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Kensington Active
The main advantage of trading using opposite Massmutual Premier and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.| Massmutual Premier vs. Franklin Government Money | Massmutual Premier vs. Us Government Plus | Massmutual Premier vs. Lord Abbett Government | Massmutual Premier vs. Aig Government Money |
| Kensington Active vs. Deutsche Health And | Kensington Active vs. Baillie Gifford Health | Kensington Active vs. Alphacentric Lifesci Healthcare | Kensington Active vs. Alger Health Sciences |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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