Correlation Between Massmutual Select and American Beacon
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and American Beacon 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 Beacon 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 Beacon Twentyfour, you can compare the effects of market volatilities on Massmutual Select and American Beacon 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 Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and American Beacon.
Diversification Opportunities for Massmutual Select and American Beacon
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Massmutual and American is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Twen has no effect on the direction of Massmutual Select i.e., Massmutual Select and American Beacon go up and down completely randomly.
Pair Corralation between Massmutual Select and American Beacon
Assuming the 90 days horizon Massmutual Select is expected to generate 2.46 times less return on investment than American Beacon. In addition to that, Massmutual Select is 12.99 times more volatile than American Beacon Twentyfour. It trades about 0.01 of its total potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.25 per unit of volatility. If you would invest 779.00 in American Beacon Twentyfour on September 13, 2024 and sell it today you would earn a total of 96.00 from holding American Beacon Twentyfour or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Massmutual Select Diversified vs. American Beacon Twentyfour
Performance |
| Timeline |
| Massmutual Select |
| American Beacon Twen |
Massmutual Select and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and American Beacon
The main advantage of trading using opposite Massmutual Select and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Massmutual Select vs. Lsv Small Cap | Massmutual Select vs. Palm Valley Capital | Massmutual Select vs. Boston Partners Small | Massmutual Select vs. Mutual Of America |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
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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