Correlation Between Massmutual Select and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Transamerica Intermediate 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 Transamerica Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select T and Transamerica Intermediate Muni, you can compare the effects of market volatilities on Massmutual Select and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Transamerica Intermediate.
Diversification Opportunities for Massmutual Select and Transamerica Intermediate
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Massmutual and Transamerica is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select T and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 T are associated (or correlated) with Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Massmutual Select i.e., Massmutual Select and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Massmutual Select and Transamerica Intermediate
Assuming the 90 days horizon Massmutual Select T is expected to generate 2.01 times more return on investment than Transamerica Intermediate. However, Massmutual Select is 2.01 times more volatile than Transamerica Intermediate Muni. It trades about 0.07 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.07 per unit of risk. If you would invest 1,271 in Massmutual Select T on September 3, 2024 and sell it today you would earn a total of 229.00 from holding Massmutual Select T or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select T vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Massmutual Select |
| Transamerica Intermediate |
Massmutual Select and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Transamerica Intermediate
The main advantage of trading using opposite Massmutual Select and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.The idea behind Massmutual Select T and Transamerica Intermediate Muni pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Transamerica Intermediate vs. Us Real Estate | Transamerica Intermediate vs. Jhancock Real Estate | Transamerica Intermediate vs. Amg Managers Centersquare | Transamerica Intermediate vs. Columbia Real Estate |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |