Correlation Between Stone Ridge and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Stone Ridge 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 Stone Ridge and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge Diversified and Massmutual Select T, you can compare the effects of market volatilities on Stone Ridge 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 Stone Ridge with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Massmutual Select.
Diversification Opportunities for Stone Ridge and Massmutual Select
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stone and Massmutual is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Stone Ridge 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 Stone Ridge Diversified 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 Stone Ridge i.e., Stone Ridge and Massmutual Select go up and down completely randomly.
Pair Corralation between Stone Ridge and Massmutual Select
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.46 times more return on investment than Massmutual Select. However, Stone Ridge Diversified is 2.17 times less risky than Massmutual Select. It trades about 0.61 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.11 per unit of risk. If you would invest 1,125 in Stone Ridge Diversified on September 15, 2024 and sell it today you would earn a total of 21.00 from holding Stone Ridge Diversified or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Massmutual Select T
Performance |
| Timeline |
| Stone Ridge Diversified |
| Massmutual Select |
Stone Ridge and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Massmutual Select
The main advantage of trading using opposite Stone Ridge and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge 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.| Stone Ridge vs. Stone Ridge High | Stone Ridge vs. Stone Ridge High | Stone Ridge vs. Red Oak Technology | Stone Ridge vs. John Hancock Focused |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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