Correlation Between American Funds and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both American Funds and Mainstay Growth 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 Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Mainstay Growth Etf, you can compare the effects of market volatilities on American Funds and Mainstay Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mainstay Growth.
Diversification Opportunities for American Funds and Mainstay Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Mainstay is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Mainstay Growth Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Etf 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 The are associated (or correlated) with Mainstay Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Etf has no effect on the direction of American Funds i.e., American Funds and Mainstay Growth go up and down completely randomly.
Pair Corralation between American Funds and Mainstay Growth
Assuming the 90 days horizon American Funds is expected to generate 2.74 times less return on investment than Mainstay Growth. But when comparing it to its historical volatility, American Funds The is 1.53 times less risky than Mainstay Growth. It trades about 0.1 of its potential returns per unit of risk. Mainstay Growth Etf is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,461 in Mainstay Growth Etf on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Mainstay Growth Etf or generate 2.67% 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 The vs. Mainstay Growth Etf
Performance |
| Timeline |
| American Funds |
| Mainstay Growth Etf |
American Funds and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mainstay Growth
The main advantage of trading using opposite American Funds and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mainstay Growth 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 Growth will offset losses from the drop in Mainstay Growth's long position.| American Funds vs. Wells Fargo Advantage | American Funds vs. James Balanced Golden | American Funds vs. Short Precious Metals | American Funds vs. Global Gold Fund |
| Mainstay Growth vs. Siit Emerging Markets | Mainstay Growth vs. Rbc Bluebay Emerging | Mainstay Growth vs. Franklin Emerging Market | Mainstay Growth vs. Shelton Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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