Correlation Between Massmutual Premier and Locorr Spectrum
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Locorr Spectrum 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 Locorr Spectrum 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 Locorr Spectrum Income, you can compare the effects of market volatilities on Massmutual Premier and Locorr Spectrum 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 Locorr Spectrum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Locorr Spectrum.
Diversification Opportunities for Massmutual Premier and Locorr Spectrum
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Massmutual and Locorr is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Locorr Spectrum Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Spectrum Income 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 Locorr Spectrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Spectrum Income has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Locorr Spectrum go up and down completely randomly.
Pair Corralation between Massmutual Premier and Locorr Spectrum
Assuming the 90 days horizon Massmutual Premier is expected to generate 2.01 times less return on investment than Locorr Spectrum. But when comparing it to its historical volatility, Massmutual Premier Diversified is 1.48 times less risky than Locorr Spectrum. It trades about 0.13 of its potential returns per unit of risk. Locorr Spectrum Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 553.00 in Locorr Spectrum Income on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Locorr Spectrum Income or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Locorr Spectrum Income
Performance |
| Timeline |
| Massmutual Premier |
| Locorr Spectrum Income |
Massmutual Premier and Locorr Spectrum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Locorr Spectrum
The main advantage of trading using opposite Massmutual Premier and Locorr Spectrum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Locorr Spectrum 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 Locorr Spectrum will offset losses from the drop in Locorr Spectrum'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 |
| Locorr Spectrum vs. Dunham High Yield | Locorr Spectrum vs. Prudential High Yield | Locorr Spectrum vs. Blackrock High Yield | Locorr Spectrum vs. Msift High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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