Correlation Between Massmutual Premier and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Massmutual Premier and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Growth Opportunities.
Diversification Opportunities for Massmutual Premier and Growth Opportunities
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Growth is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Growth Opportunities go up and down completely randomly.
Pair Corralation between Massmutual Premier and Growth Opportunities
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 0.21 times more return on investment than Growth Opportunities. However, Massmutual Premier Diversified is 4.69 times less risky than Growth Opportunities. It trades about 0.15 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about -0.05 per unit of risk. If you would invest 815.00 in Massmutual Premier Diversified on September 15, 2024 and sell it today you would earn a total of 6.00 from holding Massmutual Premier Diversified or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Growth Opportunities Fund
Performance |
| Timeline |
| Massmutual Premier |
| Growth Opportunities |
Massmutual Premier and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Growth Opportunities
The main advantage of trading using opposite Massmutual Premier and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' long position.| Massmutual Premier vs. Massmutual Select Mid | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap |
| Growth Opportunities vs. Aqr Diversified Arbitrage | Growth Opportunities vs. Wasatch Small Cap | Growth Opportunities vs. Massmutual Premier Diversified | Growth Opportunities vs. Tiaa Cref Small Cap Blend |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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