Correlation Between Massmutual Select and Allianzgi Convertible

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

Diversification Opportunities for Massmutual Select and Allianzgi Convertible

0.73

Correlation Coefficient

Massmutual Select  Allianzgi Convertible

Poor diversification

The 3 months correlation between Massmutual and Allianzgi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Mid Cap and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible 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 Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Massmutual Select i.e., Massmutual Select and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Massmutual Select and Allianzgi Convertible

Assuming the 90 days horizon Massmutual Select Mid Cap is expected to under-perform the Allianzgi Convertible. In addition to that, Massmutual Select is 2.65 times more volatile than Allianzgi Convertible Income. It trades about -0.08 of its total potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.22 per unit of volatility. If you would invest  368.00  in Allianzgi Convertible Income on September 16, 2024 and sell it today you would earn a total of  32.00  from holding Allianzgi Convertible Income or generate 8.7% return on investment over 90 days.

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

Massmutual Select Mid Cap  vs.  Allianzgi Convertible Income

Massmutual Select Mid

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Massmutual Select Mid Cap 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.

Allianzgi Convertible

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Select and Allianzgi Convertible

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

The idea behind Massmutual Select Mid Cap and Allianzgi Convertible Income 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.