Correlation Between Massmutual Premier and Massmutual Select

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Can any of the company-specific risk be diversified away by investing in both Massmutual Premier 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 Massmutual Premier and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Balanced and Massmutual Select T, you can compare the effects of market volatilities on Massmutual Premier 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 Massmutual Premier with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Massmutual Select.

Diversification Opportunities for Massmutual Premier and Massmutual Select

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Massmutual and Massmutual is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Balanced and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Massmutual Premier 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 Premier Balanced 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 Massmutual Premier i.e., Massmutual Premier and Massmutual Select go up and down completely randomly.

Pair Corralation between Massmutual Premier and Massmutual Select

Assuming the 90 days horizon Massmutual Premier Balanced is expected to generate 0.77 times more return on investment than Massmutual Select. However, Massmutual Premier Balanced is 1.3 times less risky than Massmutual Select. It trades about 0.42 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.31 per unit of risk. If you would invest  1,273  in Massmutual Premier Balanced on September 5, 2024 and sell it today you would earn a total of  51.00  from holding Massmutual Premier Balanced or generate 4.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Massmutual Premier Balanced  vs.  Massmutual Select T

 Performance 
       Timeline  
Massmutual Premier 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Premier Balanced are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Massmutual Premier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Massmutual Select 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select T are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Massmutual Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Massmutual Premier and Massmutual Select Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Massmutual Premier and Massmutual Select

The main advantage of trading using opposite Massmutual Premier and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier 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.
The idea behind Massmutual Premier Balanced and Massmutual Select T 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.
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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