Correlation Between Transamerica Financial and Mainstay New
Can any of the company-specific risk be diversified away by investing in both Transamerica Financial and Mainstay New 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 Transamerica Financial and Mainstay New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Financial Life and Mainstay New York, you can compare the effects of market volatilities on Transamerica Financial and Mainstay New 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 Transamerica Financial with a short position of Mainstay New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and Mainstay New.
Diversification Opportunities for Transamerica Financial and Mainstay New
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transamerica and Mainstay is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay New York and Transamerica Financial 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 Transamerica Financial Life are associated (or correlated) with Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of Transamerica Financial i.e., Transamerica Financial and Mainstay New go up and down completely randomly.
Pair Corralation between Transamerica Financial and Mainstay New
Assuming the 90 days horizon Transamerica Financial Life is expected to generate 2.31 times more return on investment than Mainstay New. However, Transamerica Financial is 2.31 times more volatile than Mainstay New York. It trades about 0.13 of its potential returns per unit of risk. Mainstay New York is currently generating about 0.04 per unit of risk. If you would invest 1,154 in Transamerica Financial Life on September 12, 2024 and sell it today you would earn a total of 61.00 from holding Transamerica Financial Life or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Financial Life vs. Mainstay New York
Performance |
| Timeline |
| Transamerica Financial |
| Mainstay New York |
Transamerica Financial and Mainstay New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Financial and Mainstay New
The main advantage of trading using opposite Transamerica Financial and Mainstay New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Financial position performs unexpectedly, Mainstay New 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 New will offset losses from the drop in Mainstay New's long position.| Transamerica Financial vs. SCOR PK | Transamerica Financial vs. Morningstar Unconstrained Allocation | Transamerica Financial vs. Thrivent High Yield | Transamerica Financial vs. Via Renewables |
| Mainstay New vs. Prudential High Yield | Mainstay New vs. Fidelity Capital Income | Mainstay New vs. Buffalo High Yield | Mainstay New vs. City National Rochdale |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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