Correlation Between Massmutual Select and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Sterling Capital 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 Select and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Diversified and Sterling Capital South, you can compare the effects of market volatilities on Massmutual Select and Sterling Capital 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 Select with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Sterling Capital.
Diversification Opportunities for Massmutual Select and Sterling Capital
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MASSMUTUAL and STERLING is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Sterling Capital South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital South and Massmutual Select 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 Select Diversified are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital South has no effect on the direction of Massmutual Select i.e., Massmutual Select and Sterling Capital go up and down completely randomly.
Pair Corralation between Massmutual Select and Sterling Capital
Assuming the 90 days horizon Massmutual Select Diversified is expected to under-perform the Sterling Capital. In addition to that, Massmutual Select is 8.09 times more volatile than Sterling Capital South. It trades about 0.0 of its total potential returns per unit of risk. Sterling Capital South is currently generating about 0.05 per unit of volatility. If you would invest 1,010 in Sterling Capital South on August 30, 2024 and sell it today you would earn a total of 43.00 from holding Sterling Capital South or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Diversified vs. Sterling Capital South
Performance |
| Timeline |
| Massmutual Select |
| Sterling Capital South |
Massmutual Select and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Sterling Capital
The main advantage of trading using opposite Massmutual Select and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Massmutual Select vs. Dodge Cox Stock | Massmutual Select vs. American Mutual Fund | Massmutual Select vs. American Funds American | Massmutual Select vs. American Funds American |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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