Correlation Between Mfs Aggressive and Massmutual Premier

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

By analyzing existing cross correlation between Mfs Aggressive Growth and Massmutual Premier Inflation Protected, you can compare the effects of market volatilities on Mfs Aggressive and Massmutual Premier 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 Mfs Aggressive with a short position of Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Aggressive and Massmutual Premier.

Diversification Opportunities for Mfs Aggressive and Massmutual Premier

0.83

Correlation Coefficient

Mfs Aggressive  Massmutual Premier

Very poor diversification

The 3 months correlation between Mfs and Massmutual is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Aggressive Growth and Massmutual Premier Inflation P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Mfs Aggressive 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 Mfs Aggressive Growth are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Mfs Aggressive i.e., Mfs Aggressive and Massmutual Premier go up and down completely randomly.

Pair Corralation between Mfs Aggressive and Massmutual Premier

Assuming the 90 days horizon Mfs Aggressive Growth is expected to under-perform the Massmutual Premier. In addition to that, Mfs Aggressive is 4.51 times more volatile than Massmutual Premier Inflation Protected. It trades about -0.02 of its total potential returns per unit of risk. Massmutual Premier Inflation Protected is currently generating about 0.2 per unit of volatility. If you would invest  901.00  in Massmutual Premier Inflation Protected on October 24, 2024 and sell it today you would earn a total of  8.00  from holding Massmutual Premier Inflation Protected or generate 0.89% return on investment over 90 days.

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

Mfs Aggressive Growth  vs.  Massmutual Premier Inflation P

Mfs Aggressive Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mfs Aggressive and Massmutual Premier

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

The idea behind Mfs Aggressive Growth and Massmutual Premier Inflation Protected 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.