Correlation Between Barings Emerging and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Mainstay Mackay 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 Barings Emerging and Mainstay Mackay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Mainstay Mackay Short, you can compare the effects of market volatilities on Barings Emerging and Mainstay Mackay 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 Barings Emerging with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Mainstay Mackay.
Diversification Opportunities for Barings Emerging and Mainstay Mackay
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Mainstay is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Mainstay Mackay Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Short and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Short has no effect on the direction of Barings Emerging i.e., Barings Emerging and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Barings Emerging and Mainstay Mackay
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 3.28 times more return on investment than Mainstay Mackay. However, Barings Emerging is 3.28 times more volatile than Mainstay Mackay Short. It trades about 0.12 of its potential returns per unit of risk. Mainstay Mackay Short is currently generating about 0.19 per unit of risk. If you would invest 680.00 in Barings Emerging Markets on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Barings Emerging Markets or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Mainstay Mackay Short
Performance |
| Timeline |
| Barings Emerging Markets |
| Mainstay Mackay Short |
Barings Emerging and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Mainstay Mackay
The main advantage of trading using opposite Barings Emerging and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.| Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Emerging Markets | Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Global Floating |
| Mainstay Mackay vs. Mainstay High Yield | Mainstay Mackay vs. Mainstay Tax Free | Mainstay Mackay vs. Mainstay Income Builder | Mainstay Mackay vs. Mainstay Large Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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