Correlation Between Mmzbx and Massmutual Premier

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

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

Diversification Opportunities for Mmzbx and Massmutual Premier

0.75

Correlation Coefficient

Mmzbx  Massmutual Premier

Poor diversification

The 3 months correlation between Mmzbx and Massmutual is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mmzbx and Massmutual Premier Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Mmzbx 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 Mmzbx are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Mmzbx i.e., Mmzbx and Massmutual Premier go up and down completely randomly.

Pair Corralation between Mmzbx and Massmutual Premier

Assuming the 90 days horizon Mmzbx is expected to under-perform the Massmutual Premier. In addition to that, Mmzbx is 3.78 times more volatile than Massmutual Premier Balanced. It trades about -0.01 of its total potential returns per unit of risk. Massmutual Premier Balanced is currently generating about 0.06 per unit of volatility. If you would invest  978.00  in Massmutual Premier Balanced on October 6, 2024 and sell it today you would earn a total of  154.00  from holding Massmutual Premier Balanced or generate 15.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	29.47%
Values	Daily Returns

Mmzbx  vs.  Massmutual Premier Balanced

Mmzbx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mmzbx has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Premier Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Massmutual Premier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mmzbx and Massmutual Premier

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

The idea behind Mmzbx and Massmutual Premier Balanced 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.