Correlation Between Massmutual Premier and Massmutual Select

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

By analyzing existing cross correlation between Massmutual Premier International and Massmutual Select Blue, you can compare the effects of market volatilities on Massmutual Premier and Massmutual Select 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 Premier with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Massmutual Select.

Diversification Opportunities for Massmutual Premier and Massmutual Select

-0.62

Correlation Coefficient

Massmutual Premier  Massmutual Select

Excellent diversification

The 3 months correlation between Massmutual and Massmutual is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Internation and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and Massmutual Premier 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 Premier International are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Blue has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Massmutual Select go up and down completely randomly.

Pair Corralation between Massmutual Premier and Massmutual Select

Assuming the 90 days horizon Massmutual Premier International is expected to under-perform the Massmutual Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Massmutual Premier International is 1.97 times less risky than Massmutual Select. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Massmutual Select Blue is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,043  in Massmutual Select Blue on September 15, 2024 and sell it today you would lose (58.00) from holding Massmutual Select Blue or give up 2.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Massmutual Premier Internation  vs.  Massmutual Select Blue

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Premier International 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.

Massmutual Select Blue

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Select Blue has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Massmutual Premier and Massmutual Select

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

The idea behind Massmutual Premier International and Massmutual Select Blue 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.