Correlation Between Nasdaq 100 and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Massmutual Premier Short Duration, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Massmutual Premier.
Diversification Opportunities for Nasdaq 100 and Massmutual Premier
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Massmutual is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Massmutual Premier Short Durat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 Nasdaq 100 i.e., Nasdaq 100 and Massmutual Premier go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Massmutual Premier
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 21.06 times more return on investment than Massmutual Premier. However, Nasdaq 100 is 21.06 times more volatile than Massmutual Premier Short Duration. It trades about 0.16 of its potential returns per unit of risk. Massmutual Premier Short Duration is currently generating about 0.18 per unit of risk. If you would invest 42,463 in Nasdaq 100 2x Strategy on September 13, 2024 and sell it today you would earn a total of 2,549 from holding Nasdaq 100 2x Strategy or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Massmutual Premier Short Durat
Performance |
| Timeline |
| Nasdaq 100 2x |
| Massmutual Premier |
Nasdaq 100 and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Massmutual Premier
The main advantage of trading using opposite Nasdaq 100 and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Lgm Risk Managed | Nasdaq 100 vs. Franklin High Income | Nasdaq 100 vs. Alliancebernstein Global High | Nasdaq 100 vs. Artisan High Income |
| Massmutual Premier vs. Massmutual Select Mid | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap | Massmutual Premier vs. Massmutual Select Mid Cap |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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