Correlation Between Massmutual Select and Ab Select
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Ab 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 Ab 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 Cap and Ab Select Longshort, you can compare the effects of market volatilities on Massmutual Select and Ab 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 Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Ab Select.
Diversification Opportunities for Massmutual Select and Ab Select
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and ASCLX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort 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 Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Massmutual Select i.e., Massmutual Select and Ab Select go up and down completely randomly.
Pair Corralation between Massmutual Select and Ab Select
Assuming the 90 days horizon Massmutual Select Mid Cap is expected to under-perform the Ab Select. In addition to that, Massmutual Select is 2.05 times more volatile than Ab Select Longshort. It trades about -0.06 of its total potential returns per unit of risk. Ab Select Longshort is currently generating about 0.13 per unit of volatility. If you would invest 1,300 in Ab Select Longshort on November 5, 2024 and sell it today you would earn a total of 17.00 from holding Ab Select Longshort or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Mid Cap vs. Ab Select Longshort
Performance |
| Timeline |
| Massmutual Select Mid |
| Ab Select Longshort |
Massmutual Select and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Ab Select
The main advantage of trading using opposite Massmutual Select and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Ab 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 Ab Select will offset losses from the drop in Ab Select's long position.| Massmutual Select vs. Nasdaq 100 2x Strategy | Massmutual Select vs. Balanced Strategy Fund | Massmutual Select vs. Investec Emerging Markets | Massmutual Select vs. Western Assets Emerging |
| Ab Select vs. Global Technology Portfolio | Ab Select vs. Dreyfus Technology Growth | Ab Select vs. Columbia Global Technology | Ab Select vs. Red Oak Technology |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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