Correlation Between Sterling Capital and Massmutual Premier

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

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

Diversification Opportunities for Sterling Capital and Massmutual Premier

0.96

Correlation Coefficient

Sterling Capital  Massmutual Premier

Almost no diversification

The 3 months correlation between Sterling and Massmutual is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Securitized and Massmutual Premier Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Sterling Capital 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 Sterling Capital Securitized are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Sterling Capital i.e., Sterling Capital and Massmutual Premier go up and down completely randomly.

Pair Corralation between Sterling Capital and Massmutual Premier

Assuming the 90 days horizon Sterling Capital Securitized is expected to under-perform the Massmutual Premier. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sterling Capital Securitized is 1.04 times less risky than Massmutual Premier. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Massmutual Premier Diversified is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  835.00  in Massmutual Premier Diversified on September 17, 2024 and sell it today you would lose (17.00) from holding Massmutual Premier Diversified or give up 2.04% of portfolio value over 90 days.

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

Sterling Capital Securitized  vs.  Massmutual Premier Diversified

Sterling Capital Sec

Risk-Adjusted Performance

0 of 100

Very Weak

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

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sterling Capital and Massmutual Premier

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

The idea behind Sterling Capital Securitized and Massmutual Premier 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.