Correlation Between Dodge International and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Dodge International 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 Dodge International and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Massmutual Select Focused, you can compare the effects of market volatilities on Dodge International 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 Dodge International with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge International and Massmutual Select.
Diversification Opportunities for Dodge International and Massmutual Select
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Massmutual is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Massmutual Select Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Focused and Dodge International 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 Dodge International Stock 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 Focused has no effect on the direction of Dodge International i.e., Dodge International and Massmutual Select go up and down completely randomly.
Pair Corralation between Dodge International and Massmutual Select
Assuming the 90 days horizon Dodge International Stock is expected to generate 0.41 times more return on investment than Massmutual Select. However, Dodge International Stock is 2.41 times less risky than Massmutual Select. It trades about -0.27 of its potential returns per unit of risk. Massmutual Select Focused is currently generating about -0.29 per unit of risk. If you would invest 5,284 in Dodge International Stock on September 24, 2024 and sell it today you would lose (314.00) from holding Dodge International Stock or give up 5.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dodge International Stock vs. Massmutual Select Focused
Performance |
Timeline |
Dodge International Stock |
Massmutual Select Focused |
Dodge International and Massmutual Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge International and Massmutual Select
The main advantage of trading using opposite Dodge International and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge International 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.Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Income Fund | Dodge International vs. Dodge Balanced Fund | Dodge International vs. The Fairholme Fund |
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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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