Correlation Between Massmutual Premier and Edge Midcap
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Edge Midcap 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 Edge Midcap 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 Edge Midcap Fund, you can compare the effects of market volatilities on Massmutual Premier and Edge Midcap 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 Edge Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Edge Midcap.
Diversification Opportunities for Massmutual Premier and Edge Midcap
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Edge is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Edge Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edge Midcap Fund 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 Edge Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edge Midcap Fund has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Edge Midcap go up and down completely randomly.
Pair Corralation between Massmutual Premier and Edge Midcap
Assuming the 90 days horizon Massmutual Premier is expected to generate 5.81 times less return on investment than Edge Midcap. But when comparing it to its historical volatility, Massmutual Premier Diversified is 2.58 times less risky than Edge Midcap. It trades about 0.02 of its potential returns per unit of risk. Edge Midcap Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,223 in Edge Midcap Fund on September 3, 2024 and sell it today you would earn a total of 202.00 from holding Edge Midcap Fund or generate 16.52% 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. Edge Midcap Fund
Performance |
| Timeline |
| Massmutual Premier |
| Edge Midcap Fund |
Massmutual Premier and Edge Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Edge Midcap
The main advantage of trading using opposite Massmutual Premier and Edge Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Edge Midcap 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 Edge Midcap will offset losses from the drop in Edge Midcap's long position.| Massmutual Premier vs. Dreyfusstandish Global Fixed | Massmutual Premier vs. Nationwide Global Equity | Massmutual Premier vs. Legg Mason Global | Massmutual Premier vs. Barings Global Floating |
| Edge Midcap vs. Massmutual Premier Diversified | Edge Midcap vs. Western Asset Diversified | Edge Midcap vs. Aqr Diversified Arbitrage | Edge Midcap vs. Blackrock Conservative Prprdptfinstttnl |
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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