Correlation Between Massmutual Premier and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Alger Spectra 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 Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Diversified and Alger Spectra, you can compare the effects of market volatilities on Massmutual Premier and Alger Spectra 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 Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Alger Spectra.
Diversification Opportunities for Massmutual Premier and Alger Spectra
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Massmutual and Alger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Alger Spectra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 Diversified are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Alger Spectra go up and down completely randomly.
Pair Corralation between Massmutual Premier and Alger Spectra
Assuming the 90 days horizon Massmutual Premier is expected to generate 4.56 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Massmutual Premier Diversified is 5.01 times less risky than Alger Spectra. It trades about 0.24 of its potential returns per unit of risk. Alger Spectra is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,326 in Alger Spectra on June 12, 2025 and sell it today you would earn a total of 530.00 from holding Alger Spectra or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Massmutual Premier Diversified vs. Alger Spectra
Performance |
| Timeline |
| Massmutual Premier |
| Alger Spectra |
Massmutual Premier and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Alger Spectra
The main advantage of trading using opposite Massmutual Premier and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.The idea behind Massmutual Premier Diversified and Alger Spectra 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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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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