Correlation Between James Balanced and Mainstay High
Can any of the company-specific risk be diversified away by investing in both James Balanced 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 James Balanced and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Mainstay High Yield, you can compare the effects of market volatilities on James Balanced 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 James Balanced with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Mainstay High.
Diversification Opportunities for James Balanced and Mainstay High
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Mainstay is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden 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 James Balanced 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 James Balanced Golden 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 James Balanced i.e., James Balanced and Mainstay High go up and down completely randomly.
Pair Corralation between James Balanced and Mainstay High
Assuming the 90 days horizon James Balanced Golden is expected to generate 2.12 times more return on investment than Mainstay High. However, James Balanced is 2.12 times more volatile than Mainstay High Yield. It trades about 0.36 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.1 per unit of risk. If you would invest 2,264 in James Balanced Golden on September 4, 2024 and sell it today you would earn a total of 68.00 from holding James Balanced Golden or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
James Balanced Golden vs. Mainstay High Yield
Performance |
| Timeline |
| James Balanced Golden |
| Mainstay High Yield |
James Balanced and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Mainstay High
The main advantage of trading using opposite James Balanced and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced 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.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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