Correlation Between Massmutual Select and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Lord Abbett 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 Lord Abbett 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 Lord Abbett High, you can compare the effects of market volatilities on Massmutual Select and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Lord Abbett.
Diversification Opportunities for Massmutual Select and Lord Abbett
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Lord is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select T and Lord Abbett High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett High 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett High has no effect on the direction of Massmutual Select i.e., Massmutual Select and Lord Abbett go up and down completely randomly.
Pair Corralation between Massmutual Select and Lord Abbett
Assuming the 90 days horizon Massmutual Select T is expected to generate 1.31 times more return on investment than Lord Abbett. However, Massmutual Select is 1.31 times more volatile than Lord Abbett High. It trades about 0.08 of its potential returns per unit of risk. Lord Abbett High is currently generating about 0.06 per unit of risk. If you would invest 1,358 in Massmutual Select T on August 30, 2024 and sell it today you would earn a total of 515.00 from holding Massmutual Select T or generate 37.92% 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. Lord Abbett High
Performance |
| Timeline |
| Massmutual Select |
| Lord Abbett High |
Massmutual Select and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Lord Abbett
The main advantage of trading using opposite Massmutual Select and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Massmutual Select vs. Victory High Yield | Massmutual Select vs. Pimco High Yield | Massmutual Select vs. Fidelity Capital Income | Massmutual Select vs. Msift High Yield |
| Lord Abbett vs. Aqr Managed Futures | Lord Abbett vs. The Hartford Inflation | Lord Abbett vs. The Hartford Inflation | Lord Abbett vs. Guidepath Managed Futures |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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