Correlation Between Massmutual Select and Virtus Convertible
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Virtus Convertible 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 Virtus Convertible 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 Virtus Convertible, you can compare the effects of market volatilities on Massmutual Select and Virtus Convertible 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 Virtus Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Virtus Convertible.
Diversification Opportunities for Massmutual Select and Virtus Convertible
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Massmutual and Virtus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Virtus Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Convertible 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 Virtus Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Convertible has no effect on the direction of Massmutual Select i.e., Massmutual Select and Virtus Convertible go up and down completely randomly.
Pair Corralation between Massmutual Select and Virtus Convertible
Assuming the 90 days horizon Massmutual Select Diversified is expected to under-perform the Virtus Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Select Diversified is 1.15 times less risky than Virtus Convertible. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Virtus Convertible is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,594 in Virtus Convertible on September 13, 2024 and sell it today you would earn a total of 116.00 from holding Virtus Convertible or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Diversified vs. Virtus Convertible
Performance |
| Timeline |
| Massmutual Select |
| Virtus Convertible |
Massmutual Select and Virtus Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Virtus Convertible
The main advantage of trading using opposite Massmutual Select and Virtus Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Virtus Convertible 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 Convertible will offset losses from the drop in Virtus Convertible's long position.| Massmutual Select vs. Gmo High Yield | Massmutual Select vs. Buffalo High Yield | Massmutual Select vs. Prudential High Yield | Massmutual Select vs. City National Rochdale |
| Virtus Convertible vs. Investec Emerging Markets | Virtus Convertible vs. Siit Emerging Markets | Virtus Convertible vs. Western Asset Diversified | Virtus Convertible vs. Artisan Emerging Markets |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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