Correlation Between Saat Moderate and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Saat Moderate 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 Saat Moderate and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Moderate Strategy and Massmutual Premier Balanced, you can compare the effects of market volatilities on Saat Moderate 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 Saat Moderate with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Massmutual Premier.
Diversification Opportunities for Saat Moderate and Massmutual Premier
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saat and Massmutual is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Massmutual Premier Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Saat Moderate 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 Saat Moderate 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 Saat Moderate i.e., Saat Moderate and Massmutual Premier go up and down completely randomly.
Pair Corralation between Saat Moderate and Massmutual Premier
Assuming the 90 days horizon Saat Moderate is expected to generate 3.57 times less return on investment than Massmutual Premier. But when comparing it to its historical volatility, Saat Moderate Strategy is 1.88 times less risky than Massmutual Premier. It trades about 0.12 of its potential returns per unit of risk. Massmutual Premier Balanced is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,289 in Massmutual Premier Balanced on August 29, 2024 and sell it today you would earn a total of 33.00 from holding Massmutual Premier Balanced or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Massmutual Premier Balanced
Performance |
| Timeline |
| Saat Moderate Strategy |
| Massmutual Premier |
Saat Moderate and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Massmutual Premier
The main advantage of trading using opposite Saat Moderate and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate 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.| Saat Moderate vs. Vanguard Wellesley Income | Saat Moderate vs. HUMANA INC | Saat Moderate vs. Aquagold International | Saat Moderate vs. Barloworld Ltd ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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