Correlation Between World Energy and Mainstay International
Can any of the company-specific risk be diversified away by investing in both World Energy and Mainstay International 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 World Energy and Mainstay International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Mainstay International Opportunities, you can compare the effects of market volatilities on World Energy and Mainstay International 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 World Energy with a short position of Mainstay International. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Mainstay International.
Diversification Opportunities for World Energy and Mainstay International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Mainstay is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Mainstay International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay International and World Energy 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 World Energy Fund are associated (or correlated) with Mainstay International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay International has no effect on the direction of World Energy i.e., World Energy and Mainstay International go up and down completely randomly.
Pair Corralation between World Energy and Mainstay International
Assuming the 90 days horizon World Energy Fund is expected to generate 1.66 times more return on investment than Mainstay International. However, World Energy is 1.66 times more volatile than Mainstay International Opportunities. It trades about 0.04 of its potential returns per unit of risk. Mainstay International Opportunities is currently generating about 0.06 per unit of risk. If you would invest 1,235 in World Energy Fund on September 14, 2024 and sell it today you would earn a total of 252.00 from holding World Energy Fund or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Mainstay International Opportu
Performance |
| Timeline |
| World Energy |
| Mainstay International |
World Energy and Mainstay International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Mainstay International
The main advantage of trading using opposite World Energy and Mainstay International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Mainstay International 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 International will offset losses from the drop in Mainstay International's long position.| World Energy vs. Siit Ultra Short | World Energy vs. Alpine Ultra Short | World Energy vs. Franklin Federal Limited Term | World Energy vs. Barings Active Short |
| Mainstay International vs. Oil Gas Ultrasector | Mainstay International vs. World Energy Fund | Mainstay International vs. Short Oil Gas | Mainstay International vs. Clearbridge Energy Mlp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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