Correlation Between Massmutual Premier and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Defensive Market 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 Defensive Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massmutual Premier Short Duration and Defensive Market Strategies, you can compare the effects of market volatilities on Massmutual Premier and Defensive Market 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 Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Defensive Market.
Diversification Opportunities for Massmutual Premier and Defensive Market
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MASSMUTUAL and Defensive is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Short Durat and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Short Duration are associated (or correlated) with Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Defensive Market go up and down completely randomly.
Pair Corralation between Massmutual Premier and Defensive Market
Assuming the 90 days horizon Massmutual Premier is expected to generate 2.74 times less return on investment than Defensive Market. But when comparing it to its historical volatility, Massmutual Premier Short Duration is 3.1 times less risky than Defensive Market. It trades about 0.27 of its potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,152 in Defensive Market Strategies on June 1, 2025 and sell it today you would earn a total of 60.00 from holding Defensive Market Strategies or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Massmutual Premier Short Durat vs. Defensive Market Strategies
Performance |
| Timeline |
| Massmutual Premier |
| Defensive Market Str |
Massmutual Premier and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massmutual Premier and Defensive Market
The main advantage of trading using opposite Massmutual Premier and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Massmutual Premier vs. Us Government Securities | Massmutual Premier vs. Ridgeworth Seix Government | Massmutual Premier vs. Us Government Securities | Massmutual Premier vs. Us Government Securities |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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