Correlation Between Massmutual Select and Templeton Emerging

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

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

Diversification Opportunities for Massmutual Select and Templeton Emerging

-0.44

Correlation Coefficient

Massmutual Select  Templeton Emerging

Very good diversification

The 3 months correlation between Massmutual and Templeton is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging 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 Cap are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Massmutual Select i.e., Massmutual Select and Templeton Emerging go up and down completely randomly.

Pair Corralation between Massmutual Select and Templeton Emerging

Assuming the 90 days horizon Massmutual Select is expected to generate 1.02 times less return on investment than Templeton Emerging. But when comparing it to its historical volatility, Massmutual Select Mid Cap is 1.38 times less risky than Templeton Emerging. It trades about 0.06 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,048  in Templeton Emerging Markets on September 14, 2024 and sell it today you would earn a total of  234.00  from holding Templeton Emerging Markets or generate 22.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Massmutual Select Mid Cap  vs.  Templeton Emerging Markets

Massmutual Select Mid

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Mid Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Massmutual Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Templeton Emerging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Emerging Markets are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable primary indicators, Templeton Emerging is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Massmutual Select and Templeton Emerging

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

The idea behind Massmutual Select Mid Cap and Templeton Emerging Markets 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.