Correlation Between Massmutual Select and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Franklin Government 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 Franklin Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Mid and Franklin Government Money, you can compare the effects of market volatilities on Massmutual Select and Franklin Government 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 Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Franklin Government.
Diversification Opportunities for Massmutual Select and Franklin Government
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Massmutual and Franklin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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 Mid are associated (or correlated) with Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Massmutual Select i.e., Massmutual Select and Franklin Government go up and down completely randomly.
Pair Corralation between Massmutual Select and Franklin Government
Assuming the 90 days horizon Massmutual Select Mid is expected to generate 7.32 times more return on investment than Franklin Government. However, Massmutual Select is 7.32 times more volatile than Franklin Government Money. It trades about 0.06 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.12 per unit of risk. If you would invest 1,803 in Massmutual Select Mid on September 12, 2024 and sell it today you would earn a total of 358.00 from holding Massmutual Select Mid or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Mid vs. Franklin Government Money
Performance |
| Timeline |
| Massmutual Select Mid |
| Franklin Government Money |
Massmutual Select and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Franklin Government
The main advantage of trading using opposite Massmutual Select and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Franklin Government 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 Franklin Government will offset losses from the drop in Franklin Government's long position.| Massmutual Select vs. Franklin Government Money | Massmutual Select vs. Prudential Government Money | Massmutual Select vs. Chestnut Street Exchange | Massmutual Select vs. Hewitt Money Market |
| Franklin Government vs. Buffalo High Yield | Franklin Government vs. Fidelity Capital Income | Franklin Government vs. T Rowe Price | Franklin Government vs. Prudential High Yield |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets |