Correlation Between Massmutual Select and Mfs Value

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

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

Diversification Opportunities for Massmutual Select and Mfs Value

0.12

Correlation Coefficient

Massmutual Select  Mfs Value

Average diversification

The 3 months correlation between Massmutual and Mfs is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund 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 Mid are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Massmutual Select i.e., Massmutual Select and Mfs Value go up and down completely randomly.

Pair Corralation between Massmutual Select and Mfs Value

Assuming the 90 days horizon Massmutual Select Mid is expected to under-perform the Mfs Value. In addition to that, Massmutual Select is 1.51 times more volatile than Mfs Value Fund. It trades about -0.12 of its total potential returns per unit of risk. Mfs Value Fund is currently generating about 0.06 per unit of volatility. If you would invest  4,826  in Mfs Value Fund on December 29, 2024 and sell it today you would earn a total of  126.00  from holding Mfs Value Fund or generate 2.61% return on investment over 90 days.

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

Massmutual Select Mid  vs.  Mfs Value Fund

Massmutual Select Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Massmutual Select Mid 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.

Mfs Value Fund

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Massmutual Select and Mfs Value

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

The idea behind Massmutual Select Mid and Mfs Value Fund 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .