Correlation Between Disney and Mainstay Fiera
Can any of the company-specific risk be diversified away by investing in both Disney and Mainstay Fiera 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 Disney and Mainstay Fiera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Mainstay Fiera Smid, you can compare the effects of market volatilities on Disney and Mainstay Fiera 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 Disney with a short position of Mainstay Fiera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Mainstay Fiera.
Diversification Opportunities for Disney and Mainstay Fiera
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Disney and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Mainstay Fiera Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Fiera Smid and Disney 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 Walt Disney are associated (or correlated) with Mainstay Fiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Fiera Smid has no effect on the direction of Disney i.e., Disney and Mainstay Fiera go up and down completely randomly.
Pair Corralation between Disney and Mainstay Fiera
Considering the 90-day investment horizon Walt Disney is expected to generate 1.49 times more return on investment than Mainstay Fiera. However, Disney is 1.49 times more volatile than Mainstay Fiera Smid. It trades about 0.48 of its potential returns per unit of risk. Mainstay Fiera Smid is currently generating about 0.36 per unit of risk. If you would invest 9,620 in Walt Disney on August 28, 2024 and sell it today you would earn a total of 1,980 from holding Walt Disney or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Mainstay Fiera Smid
Performance |
| Timeline |
| Walt Disney |
| Mainstay Fiera Smid |
Disney and Mainstay Fiera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Mainstay Fiera
The main advantage of trading using opposite Disney and Mainstay Fiera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Mainstay Fiera 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 Fiera will offset losses from the drop in Mainstay Fiera's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| Mainstay Fiera vs. Mainstay High Yield | Mainstay Fiera vs. Mainstay Tax Free | Mainstay Fiera vs. Mainstay Income Builder | Mainstay Fiera 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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