Correlation Between Massmutual Select and Investment Managers

Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Investment Managers 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 Massmutual Select and Investment Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Massmutual Select Diversified and Investment Managers Series, you can compare the effects of market volatilities on Massmutual Select and Investment Managers 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 Massmutual Select with a short position of Investment Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Investment Managers.

Diversification Opportunities for Massmutual Select and Investment Managers

-0.66

Correlation Coefficient

Massmutual Select  Investment Managers

Excellent diversification

The 3 months correlation between MASSMUTUAL and Investment is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers and Massmutual Select 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 Massmutual Select Diversified are associated (or correlated) with Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of Massmutual Select i.e., Massmutual Select and Investment Managers go up and down completely randomly.

Pair Corralation between Massmutual Select and Investment Managers

Assuming the 90 days horizon Massmutual Select Diversified is expected to under-perform the Investment Managers. In addition to that, Massmutual Select is 4.12 times more volatile than Investment Managers Series. It trades about -0.07 of its total potential returns per unit of risk. Investment Managers Series is currently generating about 0.15 per unit of volatility. If you would invest  1,398  in Investment Managers Series on September 3, 2024 and sell it today you would earn a total of  93.00  from holding Investment Managers Series or generate 6.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Massmutual Select Diversified  vs.  Investment Managers Series

Massmutual Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Select Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Investment Managers

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investment Managers Series are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Investment Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Select and Investment Managers

The main advantage of trading using opposite Massmutual Select and Investment Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Investment Managers 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 Investment Managers will offset losses from the drop in Investment Managers' long position.

The idea behind Massmutual Select Diversified and Investment Managers Series 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.