Correlation Between Massmutual Select and Mirova Global

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

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

Diversification Opportunities for Massmutual Select and Mirova Global

0.63

Correlation Coefficient

Massmutual Select  Mirova Global

Poor diversification

The 3 months correlation between Massmutual and Mirova is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Select Total and Mirova Global Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirova Global Green 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 Total are associated (or correlated) with Mirova Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirova Global Green has no effect on the direction of Massmutual Select i.e., Massmutual Select and Mirova Global go up and down completely randomly.

Pair Corralation between Massmutual Select and Mirova Global

Assuming the 90 days horizon Massmutual Select Total is expected to generate 0.52 times more return on investment than Mirova Global. However, Massmutual Select Total is 1.91 times less risky than Mirova Global. It trades about -0.47 of its potential returns per unit of risk. Mirova Global Green is currently generating about -0.39 per unit of risk. If you would invest  851.00  in Massmutual Select Total on October 11, 2024 and sell it today you would lose (24.00) from holding Massmutual Select Total or give up 2.82% of portfolio value over 90 days.

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

Massmutual Select Total  vs.  Mirova Global Green

Massmutual Select Total

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mirova Global Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirova Global Green has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mirova Global 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 Mirova Global

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

The idea behind Massmutual Select Total and Mirova Global Green 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.