Correlation Between Ab Global and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Mainstay Moderate Allocation, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Mainstay Moderate.
Diversification Opportunities for Ab Global and Mainstay Moderate
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CABIX and Mainstay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate and Ab Global 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 Ab Global Risk 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 has no effect on the direction of Ab Global i.e., Ab Global and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Ab Global and Mainstay Moderate
Assuming the 90 days horizon Ab Global is expected to generate 1.32 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Ab Global Risk is 1.24 times less risky than Mainstay Moderate. It trades about 0.37 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,408 in Mainstay Moderate Allocation on September 3, 2024 and sell it today you would earn a total of 51.00 from holding Mainstay Moderate Allocation or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Ab Global Risk |
| Mainstay Moderate |
Ab Global and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Mainstay Moderate
The main advantage of trading using opposite Ab Global and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. Nationwide Global Equity | Ab Global vs. Locorr Dynamic Equity | Ab Global vs. Us Strategic Equity | Ab Global vs. Ms Global Fixed |
| Mainstay Moderate vs. Ab Global Risk | Mainstay Moderate vs. Ab High Income | Mainstay Moderate vs. Lgm Risk Managed | Mainstay Moderate vs. Guggenheim High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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