Correlation Between Oppenheimer International and Massmutual Select

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

By analyzing existing cross correlation between Oppenheimer International Diversified and Massmutual Select Diversified, you can compare the effects of market volatilities on Oppenheimer International and Massmutual Select 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 Oppenheimer International with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Massmutual Select.

Diversification Opportunities for Oppenheimer International and Massmutual Select

0.66

Correlation Coefficient

Oppenheimer International  Massmutual Select

Poor diversification

The 3 months correlation between Oppenheimer and Massmutual is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Dive and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Oppenheimer International 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 Oppenheimer International Diversified are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Massmutual Select go up and down completely randomly.

Pair Corralation between Oppenheimer International and Massmutual Select

Assuming the 90 days horizon Oppenheimer International Diversified is expected to under-perform the Massmutual Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer International Diversified is 1.54 times less risky than Massmutual Select. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Massmutual Select Diversified is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  1,050  in Massmutual Select Diversified on October 9, 2024 and sell it today you would lose (92.00) from holding Massmutual Select Diversified or give up 8.76% of portfolio value over 90 days.

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

Oppenheimer International Dive  vs.  Massmutual Select Diversified

Oppenheimer International

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Oppenheimer International and Massmutual Select

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

The idea behind Oppenheimer International Diversified and Massmutual Select Diversified 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.