Correlation Between City National and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Massmutual Select Diversified, you can compare the effects of market volatilities on City National 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 City National with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Massmutual Select.
Diversification Opportunities for City National and Massmutual Select
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Massmutual is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and City National 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 City National Rochdale 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 City National i.e., City National and Massmutual Select go up and down completely randomly.
Pair Corralation between City National and Massmutual Select
Assuming the 90 days horizon City National Rochdale is expected to generate 0.19 times more return on investment than Massmutual Select. However, City National Rochdale is 5.24 times less risky than Massmutual Select. It trades about 0.05 of its potential returns per unit of risk. Massmutual Select Diversified is currently generating about -0.09 per unit of risk. If you would invest 1,982 in City National Rochdale on September 14, 2024 and sell it today you would earn a total of 2.00 from holding City National Rochdale or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Massmutual Select Diversified
Performance |
| Timeline |
| City National Rochdale |
| Massmutual Select |
City National and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Massmutual Select
The main advantage of trading using opposite City National and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.| City National vs. Columbia Global Technology | City National vs. Vanguard Information Technology | City National vs. Icon Information Technology | City National vs. Science Technology Fund |
| Massmutual Select vs. Barings Active Short | Massmutual Select vs. Prudential Short Duration | Massmutual Select vs. Quantitative Longshort Equity | Massmutual Select vs. Virtus Multi Sector Short |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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