Correlation Between Massmutual Select and Evaluator Conservative

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

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

Diversification Opportunities for Massmutual Select and Evaluator Conservative

0.69

Correlation Coefficient

Massmutual Select  Evaluator Conservative

Poor diversification

The 3 months correlation between Massmutual and Evaluator is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Diversified and Evaluator Conservative Rms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaluator Conservative 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 Diversified are associated (or correlated) with Evaluator Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaluator Conservative has no effect on the direction of Massmutual Select i.e., Massmutual Select and Evaluator Conservative go up and down completely randomly.

Pair Corralation between Massmutual Select and Evaluator Conservative

Assuming the 90 days horizon Massmutual Select Diversified is expected to generate 5.31 times more return on investment than Evaluator Conservative. However, Massmutual Select is 5.31 times more volatile than Evaluator Conservative Rms. It trades about 0.02 of its potential returns per unit of risk. Evaluator Conservative Rms is currently generating about 0.05 per unit of risk. If you would invest  985.00  in Massmutual Select Diversified on October 4, 2024 and sell it today you would earn a total of  136.00  from holding Massmutual Select Diversified or generate 13.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.58%
Values	Daily Returns

Massmutual Select Diversified  vs.  Evaluator Conservative Rms

Massmutual Select

Risk-Adjusted Performance

0 of 100

Very Weak

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

Evaluator Conservative

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evaluator Conservative Rms has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Evaluator Conservative 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 Select and Evaluator Conservative

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

The idea behind Massmutual Select Diversified and Evaluator Conservative Rms 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.