Correlation Between Steward Global and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Steward Global 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 Steward Global and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Global Equity and Massmutual Select T, you can compare the effects of market volatilities on Steward Global 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 Steward Global with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Global and Massmutual Select.
Diversification Opportunities for Steward Global and Massmutual Select
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steward and Massmutual is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Steward Global Equity and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Steward Global 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 Steward Global 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 has no effect on the direction of Steward Global i.e., Steward Global and Massmutual Select go up and down completely randomly.
Pair Corralation between Steward Global and Massmutual Select
Assuming the 90 days horizon Steward Global is expected to generate 7.83 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Steward Global Equity is 1.01 times less risky than Massmutual Select. It trades about 0.03 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Massmutual Select T on August 30, 2024 and sell it today you would earn a total of 60.00 from holding Massmutual Select T or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Global Equity vs. Massmutual Select T
Performance |
| Timeline |
| Steward Global Equity |
| Massmutual Select |
Steward Global and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Global and Massmutual Select
The main advantage of trading using opposite Steward Global and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Global 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.| Steward Global vs. Franklin Real Estate | Steward Global vs. Commonwealth Real Estate | Steward Global vs. Teachers Insurance And | Steward Global vs. Pender Real Estate |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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