Correlation Between The National and Mainstay Equity
Can any of the company-specific risk be diversified away by investing in both The National and Mainstay Equity 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 The National and Mainstay Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The National Tax Free and Mainstay Equity Etf, you can compare the effects of market volatilities on The National and Mainstay Equity 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 The National with a short position of Mainstay Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of The National and Mainstay Equity.
Diversification Opportunities for The National and Mainstay Equity
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and Mainstay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and Mainstay Equity Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Equity Etf and The National 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 The National Tax Free are associated (or correlated) with Mainstay Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Equity Etf has no effect on the direction of The National i.e., The National and Mainstay Equity go up and down completely randomly.
Pair Corralation between The National and Mainstay Equity
Assuming the 90 days horizon The National is expected to generate 6.7 times less return on investment than Mainstay Equity. But when comparing it to its historical volatility, The National Tax Free is 4.03 times less risky than Mainstay Equity. It trades about 0.05 of its potential returns per unit of risk. Mainstay Equity Etf is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,189 in Mainstay Equity Etf on August 31, 2024 and sell it today you would earn a total of 448.00 from holding Mainstay Equity Etf or generate 37.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The National Tax Free vs. Mainstay Equity Etf
Performance |
| Timeline |
| National Tax |
| Mainstay Equity Etf |
The National and Mainstay Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The National and Mainstay Equity
The main advantage of trading using opposite The National and Mainstay Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National position performs unexpectedly, Mainstay Equity 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 Equity will offset losses from the drop in Mainstay Equity's long position.| The National vs. Vanguard Intermediate Term Tax Exempt | The National vs. Vanguard Intermediate Term Tax Exempt | The National vs. Tax Exempt Bond | The National vs. Tax Exempt Bond |
| Mainstay Equity vs. Great West Goldman Sachs | Mainstay Equity vs. Invesco Gold Special | Mainstay Equity vs. International Investors Gold | Mainstay Equity vs. International Investors Gold |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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