Correlation Between Pimco Total and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Pimco Total 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 Total 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 Total Return and Massmutual Select Total, you can compare the effects of market volatilities on Pimco Total 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 Total with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Massmutual Select.
Diversification Opportunities for Pimco Total and Massmutual Select
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Massmutual is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return 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 Pimco Total 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 Total Return 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 Pimco Total i.e., Pimco Total and Massmutual Select go up and down completely randomly.
Pair Corralation between Pimco Total and Massmutual Select
Assuming the 90 days horizon Pimco Total Return is expected to generate 0.84 times more return on investment than Massmutual Select. However, Pimco Total Return is 1.19 times less risky than Massmutual Select. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select Total is currently generating about 0.06 per unit of risk. If you would invest 810.00 in Pimco Total Return on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Pimco Total Return or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pimco Total Return vs. Massmutual Select Total
Performance |
| Timeline |
| Pimco Total Return |
| Massmutual Select Total |
Pimco Total and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Massmutual Select
The main advantage of trading using opposite Pimco Total and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total 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 Total vs. Gamco Global Gold | Pimco Total vs. Franklin Gold Precious | Pimco Total vs. Goldman Sachs Short | Pimco Total vs. Goldman Sachs Clean |
| Massmutual Select vs. Aig Government Money | Massmutual Select vs. Janus Investment | Massmutual Select vs. First American Funds | Massmutual Select vs. Franklin Government Money |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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