Correlation Between Massmutual Select and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Massmutual Select and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Growth Strategy.
Diversification Opportunities for Massmutual Select and Growth Strategy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Growth is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Massmutual Select i.e., Massmutual Select and Growth Strategy go up and down completely randomly.
Pair Corralation between Massmutual Select and Growth Strategy
Assuming the 90 days horizon Massmutual Select Small is expected to generate 2.21 times more return on investment than Growth Strategy. However, Massmutual Select is 2.21 times more volatile than Growth Strategy Fund. It trades about 0.12 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.08 per unit of risk. If you would invest 705.00 in Massmutual Select Small on September 14, 2024 and sell it today you would earn a total of 63.00 from holding Massmutual Select Small or generate 8.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Massmutual Select Small vs. Growth Strategy Fund
Performance |
Timeline |
Massmutual Select Small |
Growth Strategy |
Massmutual Select and Growth Strategy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Massmutual Select and Growth Strategy
The main advantage of trading using opposite Massmutual Select and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Select position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.Massmutual Select vs. Massmutual Select Mid | ||
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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