Correlation Between HP and MASSMUTUAL SELECT

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Can any of the company-specific risk be diversified away by investing in both HP 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 HP and MASSMUTUAL SELECT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and MASSMUTUAL SELECT SMALL, you can compare the effects of market volatilities on HP 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 HP with a short position of MASSMUTUAL SELECT. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and MASSMUTUAL SELECT.

Diversification Opportunities for HP and MASSMUTUAL SELECT

  Correlation Coefficient

Almost no diversification

The 3 months correlation between HP and MASSMUTUAL is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and MASSMUTUAL SELECT SMALL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASSMUTUAL SELECT SMALL and HP 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 HP Inc 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 SMALL has no effect on the direction of HP i.e., HP and MASSMUTUAL SELECT go up and down completely randomly.

Pair Corralation between HP and MASSMUTUAL SELECT

Considering the 90-day investment horizon HP Inc is expected to generate 1.62 times more return on investment than MASSMUTUAL SELECT. However, HP is 1.62 times more volatile than MASSMUTUAL SELECT SMALL. It trades about 0.2 of its potential returns per unit of risk. MASSMUTUAL SELECT SMALL is currently generating about 0.21 per unit of risk. If you would invest  2,666  in HP Inc on September 4, 2022 and sell it today you would earn a total of  298.00  from holding HP Inc or generate 11.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
ValuesDaily Returns


 Performance (%) 
HP Inc 
HP Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, HP may actually be approaching a critical reversion point that can send shares even higher in January 2023.

HP Price Channel

MASSMUTUAL Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MASSMUTUAL SELECT SMALL are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, MASSMUTUAL SELECT may actually be approaching a critical reversion point that can send shares even higher in January 2023.

MASSMUTUAL Price Channel

HP and MASSMUTUAL SELECT Volatility Contrast

   Predicted Return Density   

Pair Trading with HP and MASSMUTUAL SELECT

The main advantage of trading using opposite HP and MASSMUTUAL SELECT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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.
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The idea behind HP Inc and MASSMUTUAL SELECT SMALL 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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