Correlation Between Massmutual Select and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Massmutual Premier 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 Massmutual Premier 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 Massmutual Premier Short Duration, you can compare the effects of market volatilities on Massmutual Select and Massmutual Premier 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 Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Massmutual Premier.
Diversification Opportunities for Massmutual Select and Massmutual Premier
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Massmutual is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select T and Massmutual Premier Short Durat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier 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 Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Massmutual Select i.e., Massmutual Select and Massmutual Premier go up and down completely randomly.
Pair Corralation between Massmutual Select and Massmutual Premier
Assuming the 90 days horizon Massmutual Select T is expected to generate 5.7 times more return on investment than Massmutual Premier. However, Massmutual Select is 5.7 times more volatile than Massmutual Premier Short Duration. It trades about 0.34 of its potential returns per unit of risk. Massmutual Premier Short Duration is currently generating about 0.1 per unit of risk. If you would invest 1,861 in Massmutual Select T on September 1, 2024 and sell it today you would earn a total of 79.00 from holding Massmutual Select T or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select T vs. Massmutual Premier Short Durat
Performance |
| Timeline |
| Massmutual Select |
| Massmutual Premier |
Massmutual Select and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Massmutual Premier
The main advantage of trading using opposite Massmutual Select and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Massmutual Premier 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 Massmutual Premier will offset losses from the drop in Massmutual Premier's long position.| Massmutual Select vs. Angel Oak Financial | Massmutual Select vs. John Hancock Financial | Massmutual Select vs. Prudential Jennison Financial | Massmutual Select vs. Royce Global Financial |
| Massmutual Premier vs. Royce Global Financial | Massmutual Premier vs. Gabelli Global Financial | Massmutual Premier vs. Financials Ultrasector Profund | Massmutual Premier vs. 1919 Financial Services |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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