Correlation Between Massmutual Select and Mmzkx
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Mmzkx 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 Mmzkx 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 Mmzkx, you can compare the effects of market volatilities on Massmutual Select and Mmzkx 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 Mmzkx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Mmzkx.
Diversification Opportunities for Massmutual Select and Mmzkx
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Mmzkx is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Mmzkx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mmzkx 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 Mmzkx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mmzkx has no effect on the direction of Massmutual Select i.e., Massmutual Select and Mmzkx go up and down completely randomly.
Pair Corralation between Massmutual Select and Mmzkx
Assuming the 90 days horizon Massmutual Select Mid Cap is expected to under-perform the Mmzkx. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Select Mid Cap is 5.55 times less risky than Mmzkx. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Mmzkx is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,106 in Mmzkx on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Mmzkx or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Massmutual Select Mid Cap vs. Mmzkx
Performance |
| Timeline |
| Massmutual Select Mid |
| Mmzkx |
Massmutual Select and Mmzkx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Mmzkx
The main advantage of trading using opposite Massmutual Select and Mmzkx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Mmzkx 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 Mmzkx will offset losses from the drop in Mmzkx's long position.| Massmutual Select vs. Kinetics Market Opportunities | Massmutual Select vs. Alphacentric Hedged Market | Massmutual Select vs. Sp Midcap Index | Massmutual Select vs. Oshaughnessy Market Leaders |
| Mmzkx vs. Massmutual Select Mid | Mmzkx vs. Massmutual Select Mid Cap | Mmzkx vs. Massmutual Select Mid Cap | Mmzkx vs. Massmutual Select Mid 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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