Correlation Between EBay and Massmutual Select

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

By analyzing existing cross correlation between eBay Inc and Massmutual Select Blue, you can compare the effects of market volatilities on EBay 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 EBay with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and Massmutual Select.

Diversification Opportunities for EBay and Massmutual Select

0.0

Correlation Coefficient

EBay  Massmutual Select

Pay attention - limited upside

The 3 months correlation between EBay and Massmutual is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue and EBay 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 eBay 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 Blue has no effect on the direction of EBay i.e., EBay and Massmutual Select go up and down completely randomly.

Pair Corralation between EBay and Massmutual Select

If you would invest  4,336  in eBay Inc on February 20, 2024 and sell it today you would earn a total of  812.00  from holding eBay Inc or generate 18.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

eBay Inc  vs.  Massmutual Select Blue

eBay Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, EBay showed solid returns over the last few months and may actually be approaching a breakup point.

Massmutual Select Blue

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with EBay and Massmutual Select

The main advantage of trading using opposite EBay and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay 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.

The idea behind eBay Inc and Massmutual Select Blue 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.