Correlation Between Massmutual Premier and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Federated Strategic 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 Federated Strategic 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 Federated Strategic Income, you can compare the effects of market volatilities on Massmutual Premier and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Federated Strategic.
Diversification Opportunities for Massmutual Premier and Federated Strategic
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Federated is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Federated Strategic go up and down completely randomly.
Pair Corralation between Massmutual Premier and Federated Strategic
Assuming the 90 days horizon Massmutual Premier is expected to generate 1.96 times less return on investment than Federated Strategic. In addition to that, Massmutual Premier is 1.12 times more volatile than Federated Strategic Income. It trades about 0.04 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.08 per unit of volatility. If you would invest 730.00 in Federated Strategic Income on September 5, 2024 and sell it today you would earn a total of 105.00 from holding Federated Strategic Income or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Federated Strategic Income
Performance |
| Timeline |
| Massmutual Premier |
| Federated Strategic |
Massmutual Premier and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Federated Strategic
The main advantage of trading using opposite Massmutual Premier and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Massmutual Premier vs. Qs Large Cap | Massmutual Premier vs. Americafirst Large Cap | Massmutual Premier vs. Dodge Cox Stock | Massmutual Premier vs. Siit Large Cap |
| Federated Strategic vs. Federated Hermes Mdt | Federated Strategic vs. Federated Mdt Large | Federated Strategic vs. Federated High Income | Federated Strategic vs. Federated Hermes Conservative |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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