Correlation Between NYSE Composite and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Massmutual Premier 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 Premier 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 Premier Disciplined, you can compare the effects of market volatilities on NYSE Composite and Massmutual Premier 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 Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Massmutual Premier.
Diversification Opportunities for NYSE Composite and Massmutual Premier
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Massmutual is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Massmutual Premier Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of NYSE Composite i.e., NYSE Composite and Massmutual Premier go up and down completely randomly.
Pair Corralation between NYSE Composite and Massmutual Premier
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.12 times less return on investment than Massmutual Premier. But when comparing it to its historical volatility, NYSE Composite is 1.62 times less risky than Massmutual Premier. It trades about 0.42 of its potential returns per unit of risk. Massmutual Premier Disciplined is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,216 in Massmutual Premier Disciplined on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Massmutual Premier Disciplined or generate 6.25% 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 Premier Disciplined
Performance |
| Timeline |
NYSE Composite and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Massmutual Premier Disciplined
Pair trading matchups for Massmutual Premier
Pair Trading with NYSE Composite and Massmutual Premier
The main advantage of trading using opposite NYSE Composite and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Massmutual Premier 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 Premier will offset losses from the drop in Massmutual Premier's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Massmutual Premier vs. Massmutual Select Mid | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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