Correlation Between Pax High and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Pax 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 Pax 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 Pax High Yield and Massmutual Select Blue, you can compare the effects of market volatilities on Pax 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 Pax High with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax High and Massmutual Select.
Diversification Opportunities for Pax High and Massmutual Select
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pax and Massmutual is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pax High Yield and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and Pax 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 Pax 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 Blue has no effect on the direction of Pax High i.e., Pax High and Massmutual Select go up and down completely randomly.
Pair Corralation between Pax High and Massmutual Select
Assuming the 90 days horizon Pax High is expected to generate 3.23 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Pax High Yield is 6.52 times less risky than Massmutual Select. It trades about 0.14 of its potential returns per unit of risk. Massmutual Select Blue is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,864 in Massmutual Select Blue on September 14, 2024 and sell it today you would earn a total of 445.00 from holding Massmutual Select Blue or generate 23.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pax High Yield vs. Massmutual Select Blue
Performance |
| Timeline |
| Pax High Yield |
| Massmutual Select Blue |
Pax High and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax High and Massmutual Select
The main advantage of trading using opposite Pax High and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax 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.| Pax High vs. Pax E Bond | Pax High vs. Pax Global Environmental | Pax High vs. Pax Esg Beta | Pax High vs. Pax Global Opportunities |
| Massmutual Select vs. Ab Bond Inflation | Massmutual Select vs. Deutsche Global Inflation | Massmutual Select vs. Lord Abbett Inflation | Massmutual Select vs. Short Duration Inflation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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