Correlation Between Total Return and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Total Return 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 Total Return and Massmutual Select 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 Select Total, you can compare the effects of market volatilities on Total Return 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 Total Return with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Massmutual Select.
Diversification Opportunities for Total Return and Massmutual Select
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Total and Massmutual is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Massmutual Select Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Total 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 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 Total has no effect on the direction of Total Return i.e., Total Return and Massmutual Select go up and down completely randomly.
Pair Corralation between Total Return and Massmutual Select
Assuming the 90 days horizon Total Return is expected to generate 1.16 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Total Return Fund is 1.1 times less risky than Massmutual Select. It trades about 0.11 of its potential returns per unit of risk. Massmutual Select Total is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 843.00 in Massmutual Select Total on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Massmutual Select Total or generate 0.95% 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 Select Total
Performance |
| Timeline |
| Total Return |
| Massmutual Select Total |
Total Return and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Massmutual Select
The main advantage of trading using opposite Total Return and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return 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.| Total Return vs. Metropolitan West Total | Total Return vs. Metropolitan West Total | Total Return vs. Pimco Total Return | Total Return vs. Total Return Fund |
| Massmutual Select vs. Metropolitan West Total | Massmutual Select vs. Metropolitan West Total | Massmutual Select vs. Pimco Total Return | Massmutual Select 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |