Correlation Between Aig Government and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Massmutual Select Total, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Massmutual Select.
Diversification Opportunities for Aig Government and Massmutual Select
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Massmutual is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Massmutual Select Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Total and Aig Government 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 Aig Government Money 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 Total has no effect on the direction of Aig Government i.e., Aig Government and Massmutual Select go up and down completely randomly.
Pair Corralation between Aig Government and Massmutual Select
Assuming the 90 days horizon Aig Government Money is expected to generate 0.29 times more return on investment than Massmutual Select. However, Aig Government Money is 3.4 times less risky than Massmutual Select. It trades about 0.56 of its potential returns per unit of risk. Massmutual Select Total is currently generating about 0.12 per unit of risk. If you would invest 1,007 in Aig Government Money on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Aig Government Money or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Massmutual Select Total
Performance |
| Timeline |
| Aig Government Money |
| Massmutual Select Total |
Aig Government and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Massmutual Select
The main advantage of trading using opposite Aig Government and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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