Correlation Between American Funds and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both American Funds and Mainstay Convertible 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 Funds and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Mainstay Vertible Fund, you can compare the effects of market volatilities on American Funds and Mainstay Convertible 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 Funds with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mainstay Convertible.
Diversification Opportunities for American Funds and Mainstay Convertible
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Mainstay is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and American Funds 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 Funds Inflation are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of American Funds i.e., American Funds and Mainstay Convertible go up and down completely randomly.
Pair Corralation between American Funds and Mainstay Convertible
Assuming the 90 days horizon American Funds is expected to generate 5.13 times less return on investment than Mainstay Convertible. But when comparing it to its historical volatility, American Funds Inflation is 1.43 times less risky than Mainstay Convertible. It trades about 0.02 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,701 in Mainstay Vertible Fund on August 30, 2024 and sell it today you would earn a total of 306.00 from holding Mainstay Vertible Fund or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Inflation vs. Mainstay Vertible Fund
Performance |
| Timeline |
| American Funds Inflation |
| Mainstay Convertible |
American Funds and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mainstay Convertible
The main advantage of trading using opposite American Funds and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. HUMANA INC | American Funds vs. Aquagold International | American Funds vs. Barloworld Ltd ADR |
| Mainstay Convertible vs. Versatile Bond Portfolio | Mainstay Convertible vs. Barings Active Short | Mainstay Convertible vs. Bbh Intermediate Municipal | Mainstay Convertible vs. Transamerica Funds |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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