Correlation Between Commonwealth Real and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Commonwealth Real and Mainstay Balanced 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 Commonwealth Real and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Real Estate and Mainstay Balanced Fund, you can compare the effects of market volatilities on Commonwealth Real and Mainstay Balanced 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 Commonwealth Real with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Real and Mainstay Balanced.
Diversification Opportunities for Commonwealth Real and Mainstay Balanced
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commonwealth and Mainstay is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Real Estate and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Commonwealth Real 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 Commonwealth Real Estate are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Commonwealth Real i.e., Commonwealth Real and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Commonwealth Real and Mainstay Balanced
Assuming the 90 days horizon Commonwealth Real Estate is expected to generate 1.83 times more return on investment than Mainstay Balanced. However, Commonwealth Real is 1.83 times more volatile than Mainstay Balanced Fund. It trades about 0.16 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.23 per unit of risk. If you would invest 2,495 in Commonwealth Real Estate on August 31, 2024 and sell it today you would earn a total of 83.00 from holding Commonwealth Real Estate or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Real Estate vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Commonwealth Real Estate |
| Mainstay Balanced |
Commonwealth Real and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Real and Mainstay Balanced
The main advantage of trading using opposite Commonwealth Real and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Real position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| Commonwealth Real vs. Commonwealth Global Fund | Commonwealth Real vs. Commonwealth Australianew Zealand | Commonwealth Real vs. Amg Managers Centersquare | Commonwealth Real vs. Commonwealth Japan Fund |
| Mainstay Balanced vs. Maryland Tax Free Bond | Mainstay Balanced vs. Ambrus Core Bond | Mainstay Balanced vs. California Bond Fund | Mainstay Balanced vs. Artisan High Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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