Correlation Between Massmutual Select and Massmutual Select

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

Diversification Opportunities for Massmutual Select and Massmutual Select

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Massmutual and Massmutual is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small 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 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 Small has no effect on the direction of Massmutual Select i.e., Massmutual Select and Massmutual Select go up and down completely randomly.

Pair Corralation between Massmutual Select and Massmutual Select

Assuming the 90 days horizon Massmutual Select is expected to generate 2.23 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Massmutual Select Mid is 1.91 times less risky than Massmutual Select. It trades about 0.14 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  831.00  in Massmutual Select Small on September 12, 2024 and sell it today you would earn a total of  109.00  from holding Massmutual Select Small or generate 13.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.44%
ValuesDaily Returns

Massmutual Select Mid  vs.  Massmutual Select Small

 Performance 
       Timeline  
Massmutual Select Mid 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days Massmutual Select Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Massmutual Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Massmutual Select Small 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Massmutual Select showed solid returns over the last few months and may actually be approaching a breakup point.

Massmutual Select and Massmutual Select Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Massmutual Select and Massmutual Select

The main advantage of trading using opposite Massmutual Select and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select 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.
The idea behind Massmutual Select Mid and Massmutual Select Small 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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