Correlation Between Massmutual Select and Bausch

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

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

Diversification Opportunities for Massmutual Select and Bausch

-0.18

Correlation Coefficient

Massmutual Select  Bausch

Good diversification

The 3 months correlation between Massmutual and Bausch is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Blue and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Blue are associated (or correlated) with Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Massmutual Select i.e., Massmutual Select and Bausch go up and down completely randomly.

Pair Corralation between Massmutual Select and Bausch

Assuming the 90 days horizon Massmutual Select Blue is expected to under-perform the Bausch. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Select Blue is 1.57 times less risky than Bausch. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Bausch Health Companies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  6,200  in Bausch Health Companies on December 30, 2024 and sell it today you would earn a total of  175.00  from holding Bausch Health Companies or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.32%
Values	Daily Returns

Massmutual Select Blue  vs.  Bausch Health Companies

Massmutual Select Blue

Risk-Adjusted Performance

Very Weak

Over the last 90 days Massmutual Select Blue has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Bausch Health Companies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bausch Health Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bausch is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Massmutual Select and Bausch

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

The idea behind Massmutual Select Blue and Bausch Health Companies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.