Correlation Between Massmutual Select and Utilities Fund
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Utilities Fund 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 Utilities Fund 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 Utilities Fund Class, you can compare the effects of market volatilities on Massmutual Select and Utilities Fund 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 Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Utilities Fund.
Diversification Opportunities for Massmutual Select and Utilities Fund
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Massmutual and Utilities is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select T and Utilities Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Class 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 Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Class has no effect on the direction of Massmutual Select i.e., Massmutual Select and Utilities Fund go up and down completely randomly.
Pair Corralation between Massmutual Select and Utilities Fund
Assuming the 90 days horizon Massmutual Select T is expected to generate 0.73 times more return on investment than Utilities Fund. However, Massmutual Select T is 1.37 times less risky than Utilities Fund. It trades about 0.14 of its potential returns per unit of risk. Utilities Fund Class is currently generating about 0.07 per unit of risk. If you would invest 1,171 in Massmutual Select T on August 31, 2024 and sell it today you would earn a total of 527.00 from holding Massmutual Select T or generate 45.0% 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. Utilities Fund Class
Performance |
| Timeline |
| Massmutual Select |
| Utilities Fund Class |
Massmutual Select and Utilities Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Utilities Fund
The main advantage of trading using opposite Massmutual Select and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Utilities Fund 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.| Massmutual Select vs. American Century High | Massmutual Select vs. Alpine High Yield | Massmutual Select vs. Legg Mason Partners | Massmutual Select vs. Valic Company I |
| Utilities Fund vs. Aqr Managed Futures | Utilities Fund vs. Western Asset Inflation | Utilities Fund vs. Cref Inflation Linked Bond | Utilities Fund vs. Aqr 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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