Correlation Between Total Return and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Total Return 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 Total Return and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Massmutual Premier Diversified, you can compare the effects of market volatilities on Total Return 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 Total Return with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Massmutual Premier.
Diversification Opportunities for Total Return and Massmutual Premier
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Total and Massmutual is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Total Return 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 Total Return 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 Total Return 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 Total Return i.e., Total Return and Massmutual Premier go up and down completely randomly.
Pair Corralation between Total Return and Massmutual Premier
Assuming the 90 days horizon Total Return Fund is expected to generate 0.9 times more return on investment than Massmutual Premier. However, Total Return Fund is 1.11 times less risky than Massmutual Premier. It trades about 0.04 of its potential returns per unit of risk. Massmutual Premier Diversified is currently generating about 0.03 per unit of risk. If you would invest 792.00 in Total Return Fund on August 24, 2024 and sell it today you would earn a total of 61.00 from holding Total Return Fund or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Return Fund vs. Massmutual Premier Diversified
Performance |
| Timeline |
| Total Return |
| Massmutual Premier |
Total Return and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Massmutual Premier
The main advantage of trading using opposite Total Return and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return 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.| Total Return vs. Baron Health Care | Total Return vs. Highland Longshort Healthcare | Total Return vs. Invesco Global Health | Total Return vs. Eventide Healthcare Life |
| Massmutual Premier vs. Metropolitan West Total | Massmutual Premier vs. Pimco Total Return | Massmutual Premier vs. Total Return Fund | Massmutual Premier vs. Total Return Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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