Correlation Between Massmutual Premier and Deutsche E

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

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

Diversification Opportunities for Massmutual Premier and Deutsche E

-0.34

Correlation Coefficient

Massmutual Premier  Deutsche E

Very good diversification

The 3 months correlation between Massmutual and Deutsche is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Deutsche E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche E Equity and Massmutual Premier 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 Premier Diversified are associated (or correlated) with Deutsche E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche E Equity has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Deutsche E go up and down completely randomly.

Pair Corralation between Massmutual Premier and Deutsche E

Assuming the 90 days horizon Massmutual Premier Diversified is expected to under-perform the Deutsche E. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Premier Diversified is 2.59 times less risky than Deutsche E. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Deutsche E Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,601  in Deutsche E Equity on September 15, 2024 and sell it today you would earn a total of  238.00  from holding Deutsche E Equity or generate 6.61% return on investment over 90 days.

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

Massmutual Premier Diversified  vs.  Deutsche E Equity

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

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

Deutsche E Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche E Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Deutsche E may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Premier and Deutsche E

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

The idea behind Massmutual Premier Diversified and Deutsche E Equity 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.