Correlation Between Sprott Gold and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Sprott Gold 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 Sprott Gold and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Massmutual Select Mid Cap, you can compare the effects of market volatilities on Sprott Gold 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 Sprott Gold with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Massmutual Select.
Diversification Opportunities for Sprott Gold and Massmutual Select
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sprott and Massmutual is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Massmutual Select Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid and Sprott Gold 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 Sprott Gold Equity 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 Mid has no effect on the direction of Sprott Gold i.e., Sprott Gold and Massmutual Select go up and down completely randomly.
Pair Corralation between Sprott Gold and Massmutual Select
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 2.2 times more return on investment than Massmutual Select. However, Sprott Gold is 2.2 times more volatile than Massmutual Select Mid Cap. It trades about 0.04 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.09 per unit of risk. If you would invest 4,475 in Sprott Gold Equity on August 31, 2024 and sell it today you would earn a total of 1,054 from holding Sprott Gold Equity or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sprott Gold Equity vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| Sprott Gold Equity |
| Massmutual Select Mid |
Sprott Gold and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Massmutual Select
The main advantage of trading using opposite Sprott Gold and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold 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.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Massmutual Select vs. Federated Global Allocation | Massmutual Select vs. Dreyfusstandish Global Fixed | Massmutual Select vs. Commonwealth Global Fund | Massmutual Select vs. Scharf Global Opportunity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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