Correlation Between Massmutual Select and Smallcap World
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Smallcap World 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 Smallcap World 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 Smallcap World Fund, you can compare the effects of market volatilities on Massmutual Select and Smallcap World 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 Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Smallcap World.
Diversification Opportunities for Massmutual Select and Smallcap World
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MASSMUTUAL and Smallcap is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World 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 Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Massmutual Select i.e., Massmutual Select and Smallcap World go up and down completely randomly.
Pair Corralation between Massmutual Select and Smallcap World
Assuming the 90 days horizon Massmutual Select Small is expected to generate 1.31 times more return on investment than Smallcap World. However, Massmutual Select is 1.31 times more volatile than Smallcap World Fund. It trades about 0.13 of its potential returns per unit of risk. Smallcap World Fund is currently generating about 0.1 per unit of risk. If you would invest 713.00 in Massmutual Select Small on August 25, 2024 and sell it today you would earn a total of 363.00 from holding Massmutual Select Small or generate 50.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Massmutual Select Small vs. Smallcap World Fund
Performance |
| Timeline |
| Massmutual Select Small |
| Smallcap World |
Massmutual Select and Smallcap World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Smallcap World
The main advantage of trading using opposite Massmutual Select and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World'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 |
| Smallcap World vs. Vanguard Small Cap Index | Smallcap World vs. Touchstone Small Cap | Smallcap World vs. Chartwell Small Cap | Smallcap World vs. Massmutual Select Small |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |