Correlation Between Massmutual Select and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Health, you can compare the effects of market volatilities on Massmutual Select and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Fidelity Advisor.
Diversification Opportunities for Massmutual Select and Fidelity Advisor
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Massmutual and Fidelity is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Fidelity Advisor Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Health 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Health has no effect on the direction of Massmutual Select i.e., Massmutual Select and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Massmutual Select and Fidelity Advisor
Assuming the 90 days horizon Massmutual Select Mid Cap is expected to generate 0.85 times more return on investment than Fidelity Advisor. However, Massmutual Select Mid Cap is 1.18 times less risky than Fidelity Advisor. It trades about 0.1 of its potential returns per unit of risk. Fidelity Advisor Health is currently generating about 0.05 per unit of risk. If you would invest 1,161 in Massmutual Select Mid Cap on August 25, 2024 and sell it today you would earn a total of 196.00 from holding Massmutual Select Mid Cap or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Mid Cap vs. Fidelity Advisor Health
Performance |
| Timeline |
| Massmutual Select Mid |
| Fidelity Advisor Health |
Massmutual Select and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Fidelity Advisor
The main advantage of trading using opposite Massmutual Select and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Massmutual Select vs. Fidelity Advisor Health | Massmutual Select vs. Lord Abbett Health | Massmutual Select vs. Baillie Gifford Health | Massmutual Select vs. Highland Longshort Healthcare |
| Fidelity Advisor vs. Fidelity Advisor Technology | Fidelity Advisor vs. Fidelity Advisor Biotechnology | Fidelity Advisor vs. Fidelity Advisor Financial | Fidelity Advisor vs. Fidelity Advisor Utilities |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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