Correlation Between Massmutual Premier and Lord Abbett

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

By analyzing existing cross correlation between Massmutual Premier Inflation Protected and Lord Abbett Inflation, you can compare the effects of market volatilities on Massmutual Premier and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Lord Abbett.

Diversification Opportunities for Massmutual Premier and Lord Abbett

0.12

Correlation Coefficient

Massmutual Premier  Lord Abbett

Average diversification

The 3 months correlation between Massmutual and Lord is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Inflation P and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation 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 Inflation Protected are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Inflation has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Lord Abbett go up and down completely randomly.

Pair Corralation between Massmutual Premier and Lord Abbett

Assuming the 90 days horizon Massmutual Premier is expected to generate 2.14 times less return on investment than Lord Abbett. In addition to that, Massmutual Premier is 1.77 times more volatile than Lord Abbett Inflation. It trades about 0.04 of its total potential returns per unit of risk. Lord Abbett Inflation is currently generating about 0.16 per unit of volatility. If you would invest  1,091  in Lord Abbett Inflation on October 24, 2024 and sell it today you would earn a total of  72.00  from holding Lord Abbett Inflation or generate 6.6% return on investment over 90 days.

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

Massmutual Premier Inflation P  vs.  Lord Abbett Inflation

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Premier Inflation Protected 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.

Lord Abbett Inflation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Inflation are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett 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 Lord Abbett

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

The idea behind Massmutual Premier Inflation Protected and Lord Abbett Inflation 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.