Correlation Between Massmutual Select and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Mesirow Financial 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 Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Mid Cap and Mesirow Financial High, you can compare the effects of market volatilities on Massmutual Select and Mesirow Financial 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 Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Mesirow Financial.
Diversification Opportunities for Massmutual Select and Mesirow Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Mesirow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Mesirow Financial High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial High 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 Cap are associated (or correlated) with Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial High has no effect on the direction of Massmutual Select i.e., Massmutual Select and Mesirow Financial go up and down completely randomly.
Pair Corralation between Massmutual Select and Mesirow Financial
Assuming the 90 days horizon Massmutual Select is expected to generate 1.23 times less return on investment than Mesirow Financial. In addition to that, Massmutual Select is 4.42 times more volatile than Mesirow Financial High. It trades about 0.04 of its total potential returns per unit of risk. Mesirow Financial High is currently generating about 0.22 per unit of volatility. If you would invest 693.00 in Mesirow Financial High on September 1, 2024 and sell it today you would earn a total of 163.00 from holding Mesirow Financial High or generate 23.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Massmutual Select Mid Cap vs. Mesirow Financial High
Performance |
| Timeline |
| Massmutual Select Mid |
| Mesirow Financial High |
Massmutual Select and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Mesirow Financial
The main advantage of trading using opposite Massmutual Select and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Mesirow Financial 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 Mesirow Financial will offset losses from the drop in Mesirow Financial's long position.| Massmutual Select vs. Mesirow Financial High | Massmutual Select vs. Fidelity Capital Income | Massmutual Select vs. Prudential Short Duration | Massmutual Select vs. Federated Institutional High |
| Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Enhanced Core |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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