Correlation Between Massmutual Select and Invesco Gold

Can any of the company-specific risk be diversified away by investing in both Massmutual Select and Invesco Gold 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 Invesco Gold 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 Invesco Gold Special, you can compare the effects of market volatilities on Massmutual Select and Invesco Gold 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 Invesco Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Select and Invesco Gold.

Diversification Opportunities for Massmutual Select and Invesco Gold

-0.65

Correlation Coefficient

Massmutual Select  Invesco Gold

Excellent diversification

The 3 months correlation between MASSMUTUAL and Invesco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Invesco Gold Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Gold Special 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 Invesco Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Gold Special has no effect on the direction of Massmutual Select i.e., Massmutual Select and Invesco Gold go up and down completely randomly.

Pair Corralation between Massmutual Select and Invesco Gold

Assuming the 90 days horizon Massmutual Select Diversified is expected to under-perform the Invesco Gold. In addition to that, Massmutual Select is 1.61 times more volatile than Invesco Gold Special. It trades about -0.07 of its total potential returns per unit of risk. Invesco Gold Special is currently generating about 0.08 per unit of volatility. If you would invest  2,623  in Invesco Gold Special on September 4, 2024 and sell it today you would earn a total of  203.00  from holding Invesco Gold Special or generate 7.74% return on investment over 90 days.

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

Massmutual Select Diversified  vs.  Invesco Gold Special

Massmutual Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Select Diversified 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Invesco Gold Special

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Gold Special are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Select and Invesco Gold

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

The idea behind Massmutual Select Diversified and Invesco Gold Special 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.