Correlation Between Multisector Bond and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Massmutual Select T, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Massmutual Select.
Diversification Opportunities for Multisector Bond and Massmutual Select
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multisector and Massmutual is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Massmutual Select go up and down completely randomly.
Pair Corralation between Multisector Bond and Massmutual Select
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.3 times more return on investment than Massmutual Select. However, Multisector Bond Sma is 3.38 times less risky than Massmutual Select. It trades about -0.18 of its potential returns per unit of risk. Massmutual Select T is currently generating about -0.25 per unit of risk. If you would invest 1,368 in Multisector Bond Sma on September 26, 2024 and sell it today you would lose (15.00) from holding Multisector Bond Sma or give up 1.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Multisector Bond Sma vs. Massmutual Select T
Performance |
Timeline |
Multisector Bond Sma |
Massmutual Select |
Multisector Bond and Massmutual Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multisector Bond and Massmutual Select
The main advantage of trading using opposite Multisector Bond and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.Multisector Bond vs. Columbia Porate Income | Multisector Bond vs. Columbia Ultra Short | Multisector Bond vs. Columbia Treasury Index | Multisector Bond vs. Multi Manager Directional Alternative |
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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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