Correlation Between Massmutual Select and American Funds
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and American Funds 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 American Funds 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 American Funds 2065, you can compare the effects of market volatilities on Massmutual Select and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and American Funds.
Diversification Opportunities for Massmutual Select and American Funds
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MASSMUTUAL and American is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and American Funds 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2065 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2065 has no effect on the direction of Massmutual Select i.e., Massmutual Select and American Funds go up and down completely randomly.
Pair Corralation between Massmutual Select and American Funds
Assuming the 90 days horizon Massmutual Select is expected to generate 10.28 times less return on investment than American Funds. In addition to that, Massmutual Select is 2.23 times more volatile than American Funds 2065. It trades about 0.01 of its total potential returns per unit of risk. American Funds 2065 is currently generating about 0.13 per unit of volatility. If you would invest 1,489 in American Funds 2065 on September 4, 2024 and sell it today you would earn a total of 352.00 from holding American Funds 2065 or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Diversified vs. American Funds 2065
Performance |
| Timeline |
| Massmutual Select |
| American Funds 2065 |
Massmutual Select and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and American Funds
The main advantage of trading using opposite Massmutual Select and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
| American Funds vs. Templeton Developing Markets | American Funds vs. Locorr Market Trend | American Funds vs. Massmutual Select Diversified | American Funds vs. Mondrian 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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