Correlation Between Catalyst Enhanced and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced and Mainstay Convertible 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 Catalyst Enhanced and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Enhanced Income and Mainstay Vertible Fund, you can compare the effects of market volatilities on Catalyst Enhanced and Mainstay Convertible 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 Catalyst Enhanced with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and Mainstay Convertible.
Diversification Opportunities for Catalyst Enhanced and Mainstay Convertible
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalyst and Mainstay is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Catalyst Enhanced 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 Catalyst Enhanced Income are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Catalyst Enhanced i.e., Catalyst Enhanced and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Catalyst Enhanced and Mainstay Convertible
Assuming the 90 days horizon Catalyst Enhanced Income is expected to under-perform the Mainstay Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Catalyst Enhanced Income is 2.54 times less risky than Mainstay Convertible. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Mainstay Vertible Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Mainstay Vertible Fund on September 3, 2024 and sell it today you would earn a total of 336.00 from holding Mainstay Vertible Fund or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Enhanced Income vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Catalyst Enhanced Income |
| Mainstay Convertible |
Catalyst Enhanced and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Enhanced and Mainstay Convertible
The main advantage of trading using opposite Catalyst Enhanced and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Enhanced position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Catalyst Enhanced vs. Blackrock Strategic Opps | Catalyst Enhanced vs. Blackrock Strategic Income | Catalyst Enhanced vs. Jpmorgan Strategic Income | Catalyst Enhanced vs. Jpmorgan Strategic Income |
| Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Mainstay Floating Rate | Mainstay Convertible vs. Calamos Vertible Fund | Mainstay Convertible vs. Mainstay High Yield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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