Correlation Between General Money and Massmutual Select

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

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

Diversification Opportunities for General Money and Massmutual Select

0.0

Correlation Coefficient

General Money  Massmutual Select

Pay attention - limited upside

The 3 months correlation between General and Massmutual is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and General Money 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 General Money Market 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 General Money i.e., General Money and Massmutual Select go up and down completely randomly.

Pair Corralation between General Money and Massmutual Select

Assuming the 90 days horizon General Money is expected to generate 1.48 times less return on investment than Massmutual Select. In addition to that, General Money is 1.49 times more volatile than Massmutual Select T. It trades about 0.02 of its total potential returns per unit of risk. Massmutual Select T is currently generating about 0.05 per unit of volatility. If you would invest  1,251  in Massmutual Select T on October 7, 2024 and sell it today you would earn a total of  186.00  from holding Massmutual Select T or generate 14.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.22%
Values	Daily Returns

General Money Market  vs.  Massmutual Select T

General Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, General Money 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

0 of 100

Very Weak

Over the last 90 days Massmutual Select T has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Massmutual Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with General Money and Massmutual Select

The main advantage of trading using opposite General Money and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money 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 General Money Market 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.