Correlation Between NYSE Composite and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Massmutual Select Small, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Massmutual Select.
Diversification Opportunities for NYSE Composite and Massmutual Select
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Massmutual is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Massmutual Select go up and down completely randomly.
Pair Corralation between NYSE Composite and Massmutual Select
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.67 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, NYSE Composite is 1.75 times less risky than Massmutual Select. It trades about 0.02 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 927.00 in Massmutual Select Small on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Massmutual Select Small or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Massmutual Select Small
Performance |
| Timeline |
NYSE Composite and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Massmutual Select Small
Pair trading matchups for Massmutual Select
Pair Trading with NYSE Composite and Massmutual Select
The main advantage of trading using opposite NYSE Composite and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| 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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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