Correlation Between Massmutual Premier and Virtus Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Virtus Multi-strategy 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 Virtus Multi-strategy 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 Virtus Multi Strategy Target, you can compare the effects of market volatilities on Massmutual Premier and Virtus Multi-strategy 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 Virtus Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Virtus Multi-strategy.
Diversification Opportunities for Massmutual Premier and Virtus Multi-strategy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Virtus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Virtus Multi Strategy Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Strategy 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 Virtus Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Multi Strategy has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Virtus Multi-strategy go up and down completely randomly.
Pair Corralation between Massmutual Premier and Virtus Multi-strategy
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 1.62 times more return on investment than Virtus Multi-strategy. However, Massmutual Premier is 1.62 times more volatile than Virtus Multi Strategy Target. It trades about 0.13 of its potential returns per unit of risk. Virtus Multi Strategy Target is currently generating about 0.17 per unit of risk. If you would invest 813.00 in Massmutual Premier Diversified on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Massmutual Premier Diversified or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| Massmutual Premier |
| Virtus Multi Strategy |
Massmutual Premier and Virtus Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Virtus Multi-strategy
The main advantage of trading using opposite Massmutual Premier and Virtus Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Virtus Multi-strategy 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 Virtus Multi-strategy will offset losses from the drop in Virtus Multi-strategy's long position.| Massmutual Premier vs. Pimco Income Fund | Massmutual Premier vs. HUMANA INC | Massmutual Premier vs. Aquagold International | Massmutual Premier vs. Barloworld Ltd ADR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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