Correlation Between American Funds and Mainstay High
Can any of the company-specific risk be diversified away by investing in both American Funds and Mainstay High 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 American Funds and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Mainstay High Yield, you can compare the effects of market volatilities on American Funds and Mainstay High 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 American Funds with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mainstay High.
Diversification Opportunities for American Funds and Mainstay High
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Mainstay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and American Funds 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 American Funds American are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of American Funds i.e., American Funds and Mainstay High go up and down completely randomly.
Pair Corralation between American Funds and Mainstay High
Assuming the 90 days horizon American Funds American is expected to generate 1.27 times more return on investment than Mainstay High. However, American Funds is 1.27 times more volatile than Mainstay High Yield. It trades about 0.23 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.21 per unit of risk. If you would invest 977.00 in American Funds American on August 29, 2024 and sell it today you would earn a total of 8.00 from holding American Funds American or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Mainstay High Yield
Performance |
| Timeline |
| American Funds American |
| Mainstay High Yield |
American Funds and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mainstay High
The main advantage of trading using opposite American Funds and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mainstay High 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 High will offset losses from the drop in Mainstay High's long position.| American Funds vs. Rbc Global Equity | American Funds vs. Rbc Ultra Short Fixed | American Funds vs. Small Cap Equity | American Funds vs. Doubleline E Fixed |
| Mainstay High vs. Virtus High Yield | Mainstay High vs. Dunham High Yield | Mainstay High vs. Pimco High Yield | Mainstay High vs. Tiaa Cref High Yield Fund |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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