Correlation Between Edge Midcap and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Edge Midcap 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 Edge Midcap and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edge Midcap Fund and Massmutual Premier Diversified, you can compare the effects of market volatilities on Edge Midcap 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 Edge Midcap with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edge Midcap and Massmutual Premier.
Diversification Opportunities for Edge Midcap and Massmutual Premier
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edge and Massmutual is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Edge Midcap Fund and Massmutual Premier Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Edge Midcap 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 Edge Midcap Fund 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 Edge Midcap i.e., Edge Midcap and Massmutual Premier go up and down completely randomly.
Pair Corralation between Edge Midcap and Massmutual Premier
Assuming the 90 days horizon Edge Midcap Fund is expected to generate 2.51 times more return on investment than Massmutual Premier. However, Edge Midcap is 2.51 times more volatile than Massmutual Premier Diversified. It trades about 0.2 of its potential returns per unit of risk. Massmutual Premier Diversified is currently generating about -0.05 per unit of risk. If you would invest 1,336 in Edge Midcap Fund on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Edge Midcap Fund or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edge Midcap Fund vs. Massmutual Premier Diversified
Performance |
| Timeline |
| Edge Midcap Fund |
| Massmutual Premier |
Edge Midcap and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edge Midcap and Massmutual Premier
The main advantage of trading using opposite Edge Midcap and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edge Midcap 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.| Edge Midcap vs. Massmutual Premier Diversified | Edge Midcap vs. Western Asset Diversified | Edge Midcap vs. Aqr Diversified Arbitrage | Edge Midcap vs. Blackrock Conservative Prprdptfinstttnl |
| Massmutual Premier vs. Dreyfusstandish Global Fixed | Massmutual Premier vs. Nationwide Global Equity | Massmutual Premier vs. Legg Mason Global | Massmutual Premier vs. Barings Global Floating |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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