Correlation Between Massmutual Premier and Neuberger Berman

Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Neuberger Berman 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 Neuberger Berman 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 Neuberger Berman Small, you can compare the effects of market volatilities on Massmutual Premier and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Neuberger Berman.

Diversification Opportunities for Massmutual Premier and Neuberger Berman

-0.54

Correlation Coefficient

Massmutual Premier  Neuberger Berman

Excellent diversification

The 3 months correlation between Massmutual and Neuberger is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Inflation P and Neuberger Berman Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Small 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Small has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Neuberger Berman go up and down completely randomly.

Pair Corralation between Massmutual Premier and Neuberger Berman

Assuming the 90 days horizon Massmutual Premier Inflation Protected is expected to generate 0.19 times more return on investment than Neuberger Berman. However, Massmutual Premier Inflation Protected is 5.27 times less risky than Neuberger Berman. It trades about 0.18 of its potential returns per unit of risk. Neuberger Berman Small is currently generating about -0.16 per unit of risk. If you would invest  899.00  in Massmutual Premier Inflation Protected on December 24, 2024 and sell it today you would earn a total of  28.00  from holding Massmutual Premier Inflation Protected or generate 3.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Massmutual Premier Inflation P  vs.  Neuberger Berman Small

Massmutual Premier

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Premier Inflation Protected are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. 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.

Neuberger Berman Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neuberger Berman Small 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Massmutual Premier and Neuberger Berman

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

The idea behind Massmutual Premier Inflation Protected and Neuberger Berman Small 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.