Correlation Between Dow Jones and Mainstay Nerstone
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mainstay Nerstone 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 Dow Jones and Mainstay Nerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Mainstay Nerstone Growth, you can compare the effects of market volatilities on Dow Jones and Mainstay Nerstone 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 Dow Jones with a short position of Mainstay Nerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mainstay Nerstone.
Diversification Opportunities for Dow Jones and Mainstay Nerstone
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Mainstay is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Mainstay Nerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Dow Jones i.e., Dow Jones and Mainstay Nerstone go up and down completely randomly.
Pair Corralation between Dow Jones and Mainstay Nerstone
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.04 times more return on investment than Mainstay Nerstone. However, Dow Jones is 1.04 times more volatile than Mainstay Nerstone Growth. It trades about 0.34 of its potential returns per unit of risk. Mainstay Nerstone Growth is currently generating about 0.25 per unit of risk. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mainstay Nerstone Growth
Performance |
| Timeline |
Dow Jones and Mainstay Nerstone Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mainstay Nerstone Growth
Pair trading matchups for Mainstay Nerstone
Pair Trading with Dow Jones and Mainstay Nerstone
The main advantage of trading using opposite Dow Jones and Mainstay Nerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mainstay Nerstone 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 Nerstone will offset losses from the drop in Mainstay Nerstone's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Mainstay Nerstone vs. Scharf Global Opportunity | Mainstay Nerstone vs. Qs Large Cap | Mainstay Nerstone vs. Falcon Focus Scv | Mainstay Nerstone vs. T Rowe Price |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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