Correlation Between Massmutual Premier and American Beacon
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and American Beacon 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 American Beacon 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 American Beacon Shapiro, you can compare the effects of market volatilities on Massmutual Premier and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and American Beacon.
Diversification Opportunities for Massmutual Premier and American Beacon
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Massmutual and American is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and American Beacon go up and down completely randomly.
Pair Corralation between Massmutual Premier and American Beacon
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 0.34 times more return on investment than American Beacon. However, Massmutual Premier Diversified is 2.91 times less risky than American Beacon. It trades about 0.24 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about -0.1 per unit of risk. If you would invest 815.00 in Massmutual Premier Diversified on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Massmutual Premier Diversified or generate 1.1% 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. American Beacon Shapiro
Performance |
| Timeline |
| Massmutual Premier |
| American Beacon Shapiro |
Massmutual Premier and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and American Beacon
The main advantage of trading using opposite Massmutual Premier and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Massmutual Premier vs. Rationalpier 88 Convertible | Massmutual Premier vs. Lord Abbett Convertible | Massmutual Premier vs. Putnam Convertible Incm Gwth | Massmutual Premier vs. Allianzgi Convertible Income |
| American Beacon vs. Nasdaq 100 Index Fund | American Beacon vs. Qs Growth Fund | American Beacon vs. L Abbett Fundamental | American Beacon 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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