Correlation Between Massmutual Select and Hennessy
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Hennessy 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 Hennessy 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 Hennessy Bp Energy, you can compare the effects of market volatilities on Massmutual Select and Hennessy 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 Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Hennessy.
Diversification Opportunities for Massmutual Select and Hennessy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Massmutual and Hennessy is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Growth and Hennessy Bp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Energy 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 Hennessy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Bp Energy has no effect on the direction of Massmutual Select i.e., Massmutual Select and Hennessy go up and down completely randomly.
Pair Corralation between Massmutual Select and Hennessy
Assuming the 90 days horizon Massmutual Select Growth is expected to under-perform the Hennessy. In addition to that, Massmutual Select is 4.04 times more volatile than Hennessy Bp Energy. It trades about -0.06 of its total potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.09 per unit of volatility. If you would invest 2,410 in Hennessy Bp Energy on September 1, 2024 and sell it today you would earn a total of 449.00 from holding Hennessy Bp Energy or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Massmutual Select Growth vs. Hennessy Bp Energy
Performance |
| Timeline |
| Massmutual Select Growth |
| Hennessy Bp Energy |
Massmutual Select and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Hennessy
The main advantage of trading using opposite Massmutual Select and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Hennessy 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 Hennessy will offset losses from the drop in Hennessy'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 |
| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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