Correlation Between Wasatch Small and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Wasatch Small 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 Wasatch Small and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Small Cap and Massmutual Select T, you can compare the effects of market volatilities on Wasatch Small 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 Wasatch Small with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Small and Massmutual Select.
Diversification Opportunities for Wasatch Small and Massmutual Select
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wasatch and Massmutual is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Small Cap and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Wasatch Small 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 Wasatch Small Cap 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 Wasatch Small i.e., Wasatch Small and Massmutual Select go up and down completely randomly.
Pair Corralation between Wasatch Small and Massmutual Select
Assuming the 90 days horizon Wasatch Small Cap is expected to under-perform the Massmutual Select. In addition to that, Wasatch Small is 1.9 times more volatile than Massmutual Select T. It trades about -0.06 of its total potential returns per unit of risk. Massmutual Select T is currently generating about 0.13 per unit of volatility. If you would invest 1,862 in Massmutual Select T on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Massmutual Select T or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wasatch Small Cap vs. Massmutual Select T
Performance |
| Timeline |
| Wasatch Small Cap |
| Massmutual Select |
Wasatch Small and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Small and Massmutual Select
The main advantage of trading using opposite Wasatch Small and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Small 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.| Wasatch Small vs. Highland Longshort Healthcare | Wasatch Small vs. The Gabelli Healthcare | Wasatch Small vs. Blackrock Health Sciences | Wasatch Small vs. Baillie Gifford Health |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
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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