Correlation Between Massmutual Select and Eventide Gilead

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

By analyzing existing cross correlation between Massmutual Select Small and Eventide Gilead Fund, you can compare the effects of market volatilities on Massmutual Select and Eventide Gilead 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 Eventide Gilead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Eventide Gilead.

Diversification Opportunities for Massmutual Select and Eventide Gilead

0.95

Correlation Coefficient

Massmutual Select  Eventide Gilead

Almost no diversification

The 3 months correlation between Massmutual and Eventide is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Eventide Gilead Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Gilead 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 Small are associated (or correlated) with Eventide Gilead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Gilead has no effect on the direction of Massmutual Select i.e., Massmutual Select and Eventide Gilead go up and down completely randomly.

Pair Corralation between Massmutual Select and Eventide Gilead

Assuming the 90 days horizon Massmutual Select Small is expected to generate 1.29 times more return on investment than Eventide Gilead. However, Massmutual Select is 1.29 times more volatile than Eventide Gilead Fund. It trades about 0.15 of its potential returns per unit of risk. Eventide Gilead Fund is currently generating about 0.13 per unit of risk. If you would invest  831.00  in Massmutual Select Small on September 12, 2024 and sell it today you would earn a total of  103.00  from holding Massmutual Select Small or generate 12.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Massmutual Select Small  vs.  Eventide Gilead Fund

Massmutual Select Small

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Massmutual Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eventide Gilead

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eventide Gilead Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Eventide Gilead may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Select and Eventide Gilead

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

The idea behind Massmutual Select Small and Eventide Gilead Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.