Correlation Between Pimco High and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Pimco High 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 Pimco High and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco High Yield and Massmutual Select T, you can compare the effects of market volatilities on Pimco High 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 Pimco High with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco High and Massmutual Select.
Diversification Opportunities for Pimco High and Massmutual Select
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pimco and Massmutual is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pimco High Yield and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Pimco High 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 Pimco High Yield 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 Pimco High i.e., Pimco High and Massmutual Select go up and down completely randomly.
Pair Corralation between Pimco High and Massmutual Select
Assuming the 90 days horizon Pimco High is expected to generate 9.29 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Pimco High Yield is 4.38 times less risky than Massmutual Select. It trades about 0.15 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,808 in Massmutual Select T on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Massmutual Select T or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco High Yield vs. Massmutual Select T
Performance |
| Timeline |
| Pimco High Yield |
| Massmutual Select |
Pimco High and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco High and Massmutual Select
The main advantage of trading using opposite Pimco High and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco High 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.| Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide | Pimco High vs. Pimco Rae Worldwide |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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