Correlation Between Ford and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Ford and Mainstay Mackay 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 Ford and Mainstay Mackay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Mainstay Mackay Tax, you can compare the effects of market volatilities on Ford and Mainstay Mackay 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 Ford with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mainstay Mackay.
Diversification Opportunities for Ford and Mainstay Mackay
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Mainstay is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mainstay Mackay Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Tax and Ford 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 Ford Motor are associated (or correlated) with Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Tax has no effect on the direction of Ford i.e., Ford and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Ford and Mainstay Mackay
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Mainstay Mackay. In addition to that, Ford is 8.27 times more volatile than Mainstay Mackay Tax. It trades about 0.0 of its total potential returns per unit of risk. Mainstay Mackay Tax is currently generating about 0.14 per unit of volatility. If you would invest 933.00 in Mainstay Mackay Tax on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay Mackay Tax or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ford Motor vs. Mainstay Mackay Tax
Performance |
| Timeline |
| Ford Motor |
| Mainstay Mackay Tax |
Ford and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mainstay Mackay
The main advantage of trading using opposite Ford and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.The idea behind Ford Motor and Mainstay Mackay Tax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mainstay Mackay vs. Prudential Jennison Financial | Mainstay Mackay vs. Artisan High Income | Mainstay Mackay vs. Blrc Sgy Mnp | Mainstay Mackay vs. Mirova Global Green |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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