Correlation Between Visa and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Massmutual Select Growth, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Massmutual Select.
Diversification Opportunities for Visa and Massmutual Select
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Massmutual is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Massmutual Select Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Growth and Visa 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 Visa Class A 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 Growth has no effect on the direction of Visa i.e., Visa and Massmutual Select go up and down completely randomly.
Pair Corralation between Visa and Massmutual Select
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.42 times more return on investment than Massmutual Select. However, Visa Class A is 2.35 times less risky than Massmutual Select. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select Growth is currently generating about -0.02 per unit of risk. If you would invest 25,230 in Visa Class A on August 25, 2024 and sell it today you would earn a total of 5,762 from holding Visa Class A or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Massmutual Select Growth
Performance |
| Timeline |
| Visa Class A |
| Massmutual Select Growth |
Visa and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Massmutual Select
The main advantage of trading using opposite Visa and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Massmutual Select vs. Us Global Investors | Massmutual Select vs. Scharf Global Opportunity | Massmutual Select vs. Barings Global Floating | Massmutual Select vs. Ab Global Risk |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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