Correlation Between Massmutual Premier and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Cref Inflation 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 Cref Inflation 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on Massmutual Premier and Cref Inflation 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 Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Cref Inflation.
Diversification Opportunities for Massmutual Premier and Cref Inflation
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massmutual and Cref is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Inflation P and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Cref Inflation go up and down completely randomly.
Pair Corralation between Massmutual Premier and Cref Inflation
Assuming the 90 days horizon Massmutual Premier Inflation Protected is expected to under-perform the Cref Inflation. In addition to that, Massmutual Premier is 1.27 times more volatile than Cref Inflation Linked Bond. It trades about -0.5 of its total potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about -0.3 per unit of volatility. If you would invest 8,568 in Cref Inflation Linked Bond on October 10, 2024 and sell it today you would lose (85.00) from holding Cref Inflation Linked Bond or give up 0.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.24% |
Values | Daily Returns |
Massmutual Premier Inflation P vs. Cref Inflation Linked Bond
Performance |
Timeline |
Massmutual Premier |
Cref Inflation Linked |
Massmutual Premier and Cref Inflation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Massmutual Premier and Cref Inflation
The main advantage of trading using opposite Massmutual Premier and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.Massmutual Premier vs. Science Technology Fund | Massmutual Premier vs. Icon Information Technology | Massmutual Premier vs. Biotechnology Fund Class | Massmutual Premier vs. Janus Global Technology |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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