Correlation Between Massmutual Select and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Metropolitan West 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 Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Select Total and Metropolitan West Total, you can compare the effects of market volatilities on Massmutual Select and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Metropolitan West.
Diversification Opportunities for Massmutual Select and Metropolitan West
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Massmutual and Metropolitan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Total and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total 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 Total are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Massmutual Select i.e., Massmutual Select and Metropolitan West go up and down completely randomly.
Pair Corralation between Massmutual Select and Metropolitan West
Assuming the 90 days horizon Massmutual Select Total is expected to under-perform the Metropolitan West. In addition to that, Massmutual Select is 1.04 times more volatile than Metropolitan West Total. It trades about -0.03 of its total potential returns per unit of risk. Metropolitan West Total is currently generating about -0.03 per unit of volatility. If you would invest 920.00 in Metropolitan West Total on September 4, 2024 and sell it today you would lose (8.00) from holding Metropolitan West Total or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Select Total vs. Metropolitan West Total
Performance |
| Timeline |
| Massmutual Select Total |
| Metropolitan West Total |
Massmutual Select and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Select and Metropolitan West
The main advantage of trading using opposite Massmutual Select and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West'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 |
| Metropolitan West vs. Siit High Yield | Metropolitan West vs. Gmo High Yield | Metropolitan West vs. Virtus High Yield | Metropolitan West vs. Alpine High Yield |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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