Correlation Between Massmutual Premier and Optimum Small
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Optimum Small 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 Optimum Small 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 Optimum Small Mid Cap, you can compare the effects of market volatilities on Massmutual Premier and Optimum Small 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 Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Optimum Small.
Diversification Opportunities for Massmutual Premier and Optimum Small
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Optimum is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Optimum Small go up and down completely randomly.
Pair Corralation between Massmutual Premier and Optimum Small
Assuming the 90 days horizon Massmutual Premier Diversified is expected to under-perform the Optimum Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Premier Diversified is 3.73 times less risky than Optimum Small. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Optimum Small Mid Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Optimum Small Mid Cap on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Optimum Small Mid Cap or generate 11.61% 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. Optimum Small Mid Cap
Performance |
| Timeline |
| Massmutual Premier |
| Optimum Small Mid |
Massmutual Premier and Optimum Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Optimum Small
The main advantage of trading using opposite Massmutual Premier and Optimum Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Optimum Small 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 Optimum Small will offset losses from the drop in Optimum Small's long position.| Massmutual Premier vs. Pace International Emerging | Massmutual Premier vs. Siit Emerging Markets | Massmutual Premier vs. Mid Cap 15x Strategy | Massmutual Premier vs. Shelton Emerging Markets |
| Optimum Small vs. T Rowe Price | Optimum Small vs. Artisan High Income | Optimum Small vs. Doubleline Yield Opportunities | Optimum Small vs. T Rowe Price |
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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| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |