Correlation Between Virtus Multi-strategy and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy 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 Virtus Multi-strategy and Massmutual Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Multi Strategy Target and Massmutual Premier Diversified, you can compare the effects of market volatilities on Virtus Multi-strategy 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 Virtus Multi-strategy with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Massmutual Premier.
Diversification Opportunities for Virtus Multi-strategy and Massmutual Premier
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Massmutual is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Massmutual Premier Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Virtus Multi-strategy 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 Virtus Multi Strategy Target 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 Virtus Multi-strategy i.e., Virtus Multi-strategy and Massmutual Premier go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Massmutual Premier
Assuming the 90 days horizon Virtus Multi-strategy is expected to generate 1.18 times less return on investment than Massmutual Premier. But when comparing it to its historical volatility, Virtus Multi Strategy Target is 1.68 times less risky than Massmutual Premier. It trades about 0.22 of its potential returns per unit of risk. Massmutual Premier Diversified is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 816.00 in Massmutual Premier Diversified on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Massmutual Premier Diversified or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Massmutual Premier Diversified
Performance |
| Timeline |
| Virtus Multi Strategy |
| Massmutual Premier |
Virtus Multi-strategy and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Massmutual Premier
The main advantage of trading using opposite Virtus Multi-strategy and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy 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.The idea behind Virtus Multi Strategy Target and Massmutual Premier Diversified 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 Premier vs. Inverse Government Long | Massmutual Premier vs. Fidelity Series Government | Massmutual Premier vs. Prudential Government Income | Massmutual Premier vs. Us Government Securities |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |