Correlation Between Massmutual Premier and Value Fund

Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Value Fund 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 Value Fund 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 Value Fund R5, you can compare the effects of market volatilities on Massmutual Premier and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Value Fund.

Diversification Opportunities for Massmutual Premier and Value Fund

0.7

Correlation Coefficient

Massmutual Premier  Value Fund

Poor diversification

The 3 months correlation between Massmutual and Value is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Value Fund R5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund R5 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund R5 has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Value Fund go up and down completely randomly.

Pair Corralation between Massmutual Premier and Value Fund

Assuming the 90 days horizon Massmutual Premier is expected to generate 2.1 times less return on investment than Value Fund. But when comparing it to its historical volatility, Massmutual Premier Diversified is 3.08 times less risky than Value Fund. It trades about 0.22 of its potential returns per unit of risk. Value Fund R5 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  754.00  in Value Fund R5 on July 27, 2025 and sell it today you would earn a total of  100.00  from holding Value Fund R5 or generate 13.26% return on investment over 90 days.

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

Massmutual Premier Diversified  vs.  Value Fund R5

Massmutual Premier

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Premier Diversified are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Massmutual Premier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Value Fund R5

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Value Fund R5 are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Value Fund 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 Premier and Value Fund

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

The idea behind Massmutual Premier Diversified and Value Fund R5 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..