Correlation Between Massmutual Select and Ab Small

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

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

Diversification Opportunities for Massmutual Select and Ab Small

0.94

Correlation Coefficient

Massmutual Select  Ab Small

Almost no diversification

The 3 months correlation between MASSMUTUAL and SCYVX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Small and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Small are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Massmutual Select i.e., Massmutual Select and Ab Small go up and down completely randomly.

Pair Corralation between Massmutual Select and Ab Small

Assuming the 90 days horizon Massmutual Select is expected to generate 1.08 times less return on investment than Ab Small. In addition to that, Massmutual Select is 1.0 times more volatile than Ab Small Cap. It trades about 0.1 of its total potential returns per unit of risk. Ab Small Cap is currently generating about 0.11 per unit of volatility. If you would invest  1,379  in Ab Small Cap on September 5, 2024 and sell it today you would earn a total of  270.00  from holding Ab Small Cap or generate 19.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.2%
Values	Daily Returns

Massmutual Select Small  vs.  Ab Small Cap

Massmutual Select Small

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Select Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Massmutual Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ab Small Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Massmutual Select and Ab Small

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

The idea behind Massmutual Select Small and Ab Small Cap 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.