Correlation Between Income Fund and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Income Fund and Mainstay Moderate 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 Income Fund and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and Mainstay Moderate Growth, you can compare the effects of market volatilities on Income Fund and Mainstay Moderate 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 Income Fund with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Mainstay Moderate.
Diversification Opportunities for Income Fund and Mainstay Moderate
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Income and Mainstay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and Mainstay Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Growth and Income Fund 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 Income Fund Of are associated (or correlated) with Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Growth has no effect on the direction of Income Fund i.e., Income Fund and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Income Fund and Mainstay Moderate
Assuming the 90 days horizon Income Fund is expected to generate 1.07 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Income Fund Of is 1.26 times less risky than Mainstay Moderate. It trades about 0.11 of its potential returns per unit of risk. Mainstay Moderate Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,353 in Mainstay Moderate Growth on August 31, 2024 and sell it today you would earn a total of 312.00 from holding Mainstay Moderate Growth or generate 23.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. Mainstay Moderate Growth
Performance |
| Timeline |
| Income Fund |
| Mainstay Moderate Growth |
Income Fund and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and Mainstay Moderate
The main advantage of trading using opposite Income Fund and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate's long position.| Income Fund vs. Capital Income Builder | Income Fund vs. Capital World Growth | Income Fund vs. American Balanced | Income Fund vs. American Funds Fundamental |
| Mainstay Moderate vs. American Funds The | Mainstay Moderate vs. Income Fund Of | Mainstay Moderate vs. Income Fund Of | Mainstay Moderate vs. Income Fund Of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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