Correlation Between Snap and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Massmutual Select T, you can compare the effects of market volatilities on Snap 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 Snap with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Massmutual Select.
Diversification Opportunities for Snap and Massmutual Select
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Massmutual is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Snap 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 Snap Inc 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 Snap i.e., Snap and Massmutual Select go up and down completely randomly.
Pair Corralation between Snap and Massmutual Select
Given the investment horizon of 90 days Snap Inc is expected to generate 7.58 times more return on investment than Massmutual Select. However, Snap is 7.58 times more volatile than Massmutual Select T. It trades about 0.03 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.09 per unit of risk. If you would invest 1,009 in Snap Inc on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Snap Inc or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Massmutual Select T
Performance |
| Timeline |
| Snap Inc |
| Massmutual Select |
Snap and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Massmutual Select
The main advantage of trading using opposite Snap and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and Massmutual Select T pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Massmutual Select vs. Dunham Real Estate | Massmutual Select vs. Virtus Real Estate | Massmutual Select vs. Simt Real Estate | Massmutual Select vs. Guggenheim Risk Managed |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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