Correlation Between Massmutual Premier and Western Asset
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Western Asset 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 Western Asset 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 Western Asset Diversified, you can compare the effects of market volatilities on Massmutual Premier and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Western Asset.
Diversification Opportunities for Massmutual Premier and Western Asset
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Massmutual and Western is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Western Asset go up and down completely randomly.
Pair Corralation between Massmutual Premier and Western Asset
Assuming the 90 days horizon Massmutual Premier Diversified is expected to generate 1.11 times more return on investment than Western Asset. However, Massmutual Premier is 1.11 times more volatile than Western Asset Diversified. It trades about 0.06 of its potential returns per unit of risk. Western Asset Diversified is currently generating about -0.03 per unit of risk. If you would invest 813.00 in Massmutual Premier Diversified on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Massmutual Premier Diversified or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Western Asset Diversified
Performance |
| Timeline |
| Massmutual Premier |
| Western Asset Diversified |
Massmutual Premier and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Western Asset
The main advantage of trading using opposite Massmutual Premier and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's 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 |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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