Correlation Between General Money and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both General Money and Mainstay Balanced 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 General Money and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Mainstay Balanced Fund, you can compare the effects of market volatilities on General Money and Mainstay Balanced 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 General Money with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Mainstay Balanced.
Diversification Opportunities for General Money and Mainstay Balanced
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Mainstay is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and General Money 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 General Money Market are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of General Money i.e., General Money and Mainstay Balanced go up and down completely randomly.
Pair Corralation between General Money and Mainstay Balanced
Assuming the 90 days horizon General Money is expected to generate 4.37 times less return on investment than Mainstay Balanced. But when comparing it to its historical volatility, General Money Market is 1.46 times less risky than Mainstay Balanced. It trades about 0.05 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,973 in Mainstay Balanced Fund on September 3, 2024 and sell it today you would earn a total of 269.00 from holding Mainstay Balanced Fund or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
General Money Market vs. Mainstay Balanced Fund
Performance |
| Timeline |
| General Money Market |
| Mainstay Balanced |
General Money and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Mainstay Balanced
The main advantage of trading using opposite General Money and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
| Mainstay Balanced vs. Wells Fargo Funds | Mainstay Balanced vs. General Money Market | Mainstay Balanced vs. First American Funds | Mainstay Balanced vs. Blackrock Exchange Portfolio |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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