Correlation Between Massmutual Select and Small Cap
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Small and Small Cap Value, you can compare the effects of market volatilities on Massmutual Select and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Small Cap.
Diversification Opportunities for Massmutual Select and Small Cap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MASSMUTUAL and SMALL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Massmutual Select i.e., Massmutual Select and Small Cap go up and down completely randomly.
Pair Corralation between Massmutual Select and Small Cap
Assuming the 90 days horizon Massmutual Select Small is expected to generate 1.01 times more return on investment than Small Cap. However, Massmutual Select is 1.01 times more volatile than Small Cap Value. It trades about 0.08 of its potential returns per unit of risk. Small Cap Value is currently generating about 0.05 per unit of risk. If you would invest 868.00 in Massmutual Select Small on August 25, 2024 and sell it today you would earn a total of 208.00 from holding Massmutual Select Small or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Small vs. Small Cap Value
Performance |
| Timeline |
| Massmutual Select Small |
| Small Cap Value |
Massmutual Select and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Small Cap
The main advantage of trading using opposite Massmutual Select and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap'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 |
| Small Cap vs. Regional Bank Fund | Small Cap vs. Regional Bank Fund | Small Cap vs. Multimanager Lifestyle Moderate | Small Cap vs. Multimanager Lifestyle Balanced |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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