Correlation Between Massmutual Select and Eaton Vance

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Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Eaton Vance 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 Eaton Vance 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 Eaton Vance Multi Strategy, you can compare the effects of market volatilities on Massmutual Select and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Eaton Vance.

Diversification Opportunities for Massmutual Select and Eaton Vance

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between MASSMUTUAL and Eaton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Eaton Vance Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Multi 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Multi has no effect on the direction of Massmutual Select i.e., Massmutual Select and Eaton Vance go up and down completely randomly.

Pair Corralation between Massmutual Select and Eaton Vance

Assuming the 90 days horizon Massmutual Select Diversified is expected to generate 8.51 times more return on investment than Eaton Vance. However, Massmutual Select is 8.51 times more volatile than Eaton Vance Multi Strategy. It trades about 0.15 of its potential returns per unit of risk. Eaton Vance Multi Strategy is currently generating about 0.21 per unit of risk. If you would invest  1,047  in Massmutual Select Diversified on September 5, 2024 and sell it today you would earn a total of  58.00  from holding Massmutual Select Diversified or generate 5.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Massmutual Select Diversified  vs.  Eaton Vance Multi Strategy

 Performance 
       Timeline  
Massmutual Select 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Massmutual Select Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Eaton Vance Multi 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Multi Strategy are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Massmutual Select and Eaton Vance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Massmutual Select and Eaton Vance

The main advantage of trading using opposite Massmutual Select and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.
The idea behind Massmutual Select Diversified and Eaton Vance Multi Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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