Correlation Between Massmutual Select and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Firsthand Alternative 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 Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Growth and Firsthand Alternative Energy, you can compare the effects of market volatilities on Massmutual Select and Firsthand Alternative 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 Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Firsthand Alternative.
Diversification Opportunities for Massmutual Select and Firsthand Alternative
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Massmutual and Firsthand is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Growth and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative 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 Growth are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Massmutual Select i.e., Massmutual Select and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Massmutual Select and Firsthand Alternative
Assuming the 90 days horizon Massmutual Select Growth is expected to under-perform the Firsthand Alternative. In addition to that, Massmutual Select is 2.97 times more volatile than Firsthand Alternative Energy. It trades about -0.08 of its total potential returns per unit of risk. Firsthand Alternative Energy is currently generating about -0.01 per unit of volatility. If you would invest 1,079 in Firsthand Alternative Energy on September 1, 2024 and sell it today you would lose (58.00) from holding Firsthand Alternative Energy or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Massmutual Select Growth vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Massmutual Select Growth |
| Firsthand Alternative |
Massmutual Select and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Firsthand Alternative
The main advantage of trading using opposite Massmutual Select and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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