Correlation Between M Large and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both M Large 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 M Large and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and Massmutual Select T, you can compare the effects of market volatilities on M Large 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 M Large with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Massmutual Select.
Diversification Opportunities for M Large and Massmutual Select
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MTCGX and Massmutual is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and M Large 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 M Large Cap 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 has no effect on the direction of M Large i.e., M Large and Massmutual Select go up and down completely randomly.
Pair Corralation between M Large and Massmutual Select
Assuming the 90 days horizon M Large Cap is expected to generate 1.86 times more return on investment than Massmutual Select. However, M Large is 1.86 times more volatile than Massmutual Select T. It trades about 0.07 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.1 per unit of risk. If you would invest 3,331 in M Large Cap on September 2, 2024 and sell it today you would earn a total of 360.00 from holding M Large Cap or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Large Cap vs. Massmutual Select T
Performance |
| Timeline |
| M Large Cap |
| Massmutual Select |
M Large and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Massmutual Select
The main advantage of trading using opposite M Large and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.| M Large vs. Prudential Real Estate | M Large vs. Jhancock Real Estate | M Large vs. Great West Real Estate | M Large vs. Fidelity Real Estate |
| Massmutual Select vs. Fundamental Large Cap | Massmutual Select vs. Tax Managed Large Cap | Massmutual Select vs. M Large Cap | Massmutual Select vs. Qs Large Cap |
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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