Correlation Between California Bond and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Massmutual Select T, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Massmutual Select.
Diversification Opportunities for California Bond and Massmutual Select
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between California and MassMutual is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Massmutual Select go up and down completely randomly.
Pair Corralation between California Bond and Massmutual Select
Assuming the 90 days horizon California Bond is expected to generate 6.35 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, California Bond Fund is 3.56 times less risky than Massmutual Select. It trades about 0.09 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,285 in Massmutual Select T on September 4, 2024 and sell it today you would earn a total of 426.00 from holding Massmutual Select T or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Massmutual Select T
Performance |
| Timeline |
| California Bond |
| Massmutual Select |
California Bond and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Massmutual Select
The main advantage of trading using opposite California Bond and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Goldman Sachs Growth | California Bond vs. Smallcap Growth Fund | California Bond vs. L Abbett Growth | California Bond vs. Small Pany Growth |
| Massmutual Select vs. Artisan High Income | Massmutual Select vs. California Bond Fund | Massmutual Select vs. Transamerica Funds | Massmutual Select vs. Dreyfusstandish Global Fixed |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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