Correlation Between Massmutual Select and Dreyfus Research

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

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

Diversification Opportunities for Massmutual Select and Dreyfus Research

0.25

Correlation Coefficient

Massmutual Select  Dreyfus Research

Modest diversification

The 3 months correlation between Massmutual and Dreyfus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Dreyfus Research Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Research Growth 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 Diversified are associated (or correlated) with Dreyfus Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Research Growth has no effect on the direction of Massmutual Select i.e., Massmutual Select and Dreyfus Research go up and down completely randomly.

Pair Corralation between Massmutual Select and Dreyfus Research

Assuming the 90 days horizon Massmutual Select Diversified is expected to generate 0.49 times more return on investment than Dreyfus Research. However, Massmutual Select Diversified is 2.03 times less risky than Dreyfus Research. It trades about 0.06 of its potential returns per unit of risk. Dreyfus Research Growth is currently generating about -0.13 per unit of risk. If you would invest  962.00  in Massmutual Select Diversified on December 24, 2024 and sell it today you would earn a total of  25.00  from holding Massmutual Select Diversified or generate 2.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Massmutual Select Diversified  vs.  Dreyfus Research Growth

Massmutual Select

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Diversified are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Massmutual Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus Research Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dreyfus Research Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Massmutual Select and Dreyfus Research

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

The idea behind Massmutual Select Diversified and Dreyfus Research Growth 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.