Correlation Between American Century and Mainstay Pinestone
Can any of the company-specific risk be diversified away by investing in both American Century and Mainstay Pinestone 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 American Century and Mainstay Pinestone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century California and Mainstay Pinestone Equity, you can compare the effects of market volatilities on American Century and Mainstay Pinestone 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 American Century with a short position of Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Mainstay Pinestone.
Diversification Opportunities for American Century and Mainstay Pinestone
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Mainstay is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding American Century California and Mainstay Pinestone Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone Equity and American Century 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 American Century California are associated (or correlated) with Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone Equity has no effect on the direction of American Century i.e., American Century and Mainstay Pinestone go up and down completely randomly.
Pair Corralation between American Century and Mainstay Pinestone
Assuming the 90 days horizon American Century is expected to generate 6.44 times less return on investment than Mainstay Pinestone. But when comparing it to its historical volatility, American Century California is 2.29 times less risky than Mainstay Pinestone. It trades about 0.04 of its potential returns per unit of risk. Mainstay Pinestone Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,629 in Mainstay Pinestone Equity on August 31, 2024 and sell it today you would earn a total of 386.00 from holding Mainstay Pinestone Equity or generate 23.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.05% |
| Values | Daily Returns |
American Century California vs. Mainstay Pinestone Equity
Performance |
| Timeline |
| American Century Cal |
| Mainstay Pinestone Equity |
American Century and Mainstay Pinestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Mainstay Pinestone
The main advantage of trading using opposite American Century and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Mainstay Pinestone 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 Pinestone will offset losses from the drop in Mainstay Pinestone's long position.| American Century vs. Valic Company I | American Century vs. Pace High Yield | American Century vs. Fidelity Capital Income | American Century vs. Mesirow Financial High |
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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 the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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