Correlation Between Massmutual Select and Guggenheim Mid

Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Guggenheim Mid 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 Guggenheim Mid 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 Guggenheim Mid Cap, you can compare the effects of market volatilities on Massmutual Select and Guggenheim Mid 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 Guggenheim Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Guggenheim Mid.

Diversification Opportunities for Massmutual Select and Guggenheim Mid

0.97

Correlation Coefficient

Massmutual Select  Guggenheim Mid

Almost no diversification

The 3 months correlation between MASSMUTUAL and Guggenheim is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Guggenheim Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Mid Cap 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 Guggenheim Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Mid Cap has no effect on the direction of Massmutual Select i.e., Massmutual Select and Guggenheim Mid go up and down completely randomly.

Pair Corralation between Massmutual Select and Guggenheim Mid

Assuming the 90 days horizon Massmutual Select Small is expected to generate 1.39 times more return on investment than Guggenheim Mid. However, Massmutual Select is 1.39 times more volatile than Guggenheim Mid Cap. It trades about 0.14 of its potential returns per unit of risk. Guggenheim Mid Cap is currently generating about 0.15 per unit of risk. If you would invest  853.00  in Massmutual Select Small on September 4, 2024 and sell it today you would earn a total of  96.00  from holding Massmutual Select Small or generate 11.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Massmutual Select Small  vs.  Guggenheim Mid Cap

Massmutual Select Small

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Small are ranked lower than 10 (%) 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.

Guggenheim Mid Cap

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Massmutual Select and Guggenheim Mid

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

The idea behind Massmutual Select Small and Guggenheim Mid Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.