Correlation Between Dow Jones and Mainstay Definedterm
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mainstay Definedterm 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 Definedterm 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 Definedterm Muncipal, you can compare the effects of market volatilities on Dow Jones and Mainstay Definedterm 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 Definedterm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mainstay Definedterm.
Diversification Opportunities for Dow Jones and Mainstay Definedterm
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Mainstay is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mainstay Definedterm Muncipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Definedterm 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 Definedterm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Definedterm has no effect on the direction of Dow Jones i.e., Dow Jones and Mainstay Definedterm go up and down completely randomly.
Pair Corralation between Dow Jones and Mainstay Definedterm
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.24 times more return on investment than Mainstay Definedterm. However, Dow Jones is 1.24 times more volatile than Mainstay Definedterm Muncipal. It trades about 0.1 of its potential returns per unit of risk. Mainstay Definedterm Muncipal is currently generating about 0.01 per unit of risk. If you would invest 3,736,112 in Dow Jones Industrial on November 9, 2024 and sell it today you would earn a total of 738,651 from holding Dow Jones Industrial or generate 19.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mainstay Definedterm Muncipal
Performance |
| Timeline |
Dow Jones and Mainstay Definedterm Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mainstay Definedterm Muncipal
Pair trading matchups for Mainstay Definedterm
Pair Trading with Dow Jones and Mainstay Definedterm
The main advantage of trading using opposite Dow Jones and Mainstay Definedterm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mainstay Definedterm 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 Definedterm will offset losses from the drop in Mainstay Definedterm's long position.| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
| Mainstay Definedterm vs. Blackrock Muniholdings Closed | Mainstay Definedterm vs. DTF Tax Free | Mainstay Definedterm vs. John Hancock Income | Mainstay Definedterm vs. MFS Investment Grade |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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