Correlation Between Mfs International and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Mfs International and Massmutual Select 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 Mfs International and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Value and Massmutual Select Mid, you can compare the effects of market volatilities on Mfs International and Massmutual Select 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 Mfs International with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Massmutual Select.
Diversification Opportunities for Mfs International and Massmutual Select
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Massmutual is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Value and Massmutual Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and Mfs International 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 Mfs International Value are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Mid has no effect on the direction of Mfs International i.e., Mfs International and Massmutual Select go up and down completely randomly.
Pair Corralation between Mfs International and Massmutual Select
Assuming the 90 days horizon Mfs International Value is expected to generate 0.92 times more return on investment than Massmutual Select. However, Mfs International Value is 1.08 times less risky than Massmutual Select. It trades about 0.02 of its potential returns per unit of risk. Massmutual Select Mid is currently generating about 0.01 per unit of risk. If you would invest 3,633 in Mfs International Value on November 27, 2024 and sell it today you would earn a total of 231.00 from holding Mfs International Value or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Value vs. Massmutual Select Mid
Performance |
| Timeline |
| Mfs International Value |
| Massmutual Select Mid |
Mfs International and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Massmutual Select
The main advantage of trading using opposite Mfs International and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Mfs International vs. Ashmore Emerging Markets | Mfs International vs. United Kingdom Small | Mfs International vs. Ab Small Cap | Mfs International vs. Vulcan Value Partners |
| Massmutual Select vs. Champlain Small | Massmutual Select vs. Touchstone Small Cap | Massmutual Select vs. United Kingdom Small | Massmutual Select vs. Ab Small Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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