Correlation Between Meridian Equity and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Meridian Equity and Massmutual Select 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 Meridian Equity and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Equity Income and Massmutual Select Small, you can compare the effects of market volatilities on Meridian Equity and Massmutual Select 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 Meridian Equity with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Equity and Massmutual Select.
Diversification Opportunities for Meridian Equity and Massmutual Select
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meridian and Massmutual is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Equity Income and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small and Meridian Equity 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 Meridian Equity Income are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Small has no effect on the direction of Meridian Equity i.e., Meridian Equity and Massmutual Select go up and down completely randomly.
Pair Corralation between Meridian Equity and Massmutual Select
Assuming the 90 days horizon Meridian Equity is expected to generate 1.89 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Meridian Equity Income is 1.62 times less risky than Massmutual Select. It trades about 0.06 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 761.00 in Massmutual Select Small on August 30, 2024 and sell it today you would earn a total of 319.00 from holding Massmutual Select Small or generate 41.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Equity Income vs. Massmutual Select Small
Performance |
| Timeline |
| Meridian Equity Income |
| Massmutual Select Small |
Meridian Equity and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Equity and Massmutual Select
The main advantage of trading using opposite Meridian Equity and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Equity position performs unexpectedly, Massmutual Select 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 Select will offset losses from the drop in Massmutual Select's long position.| Meridian Equity vs. Touchstone Premium Yield | Meridian Equity vs. Ultra Short Fixed Income | Meridian Equity vs. Maryland Tax Free Bond | Meridian Equity vs. Bbh Intermediate Municipal |
| Massmutual Select vs. Needham Aggressive Growth | Massmutual Select vs. Vanguard High Yield Tax Exempt | Massmutual Select vs. Pace High Yield | Massmutual Select vs. California High Yield Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |