Correlation Between Live Oak and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Mainstay High Yield, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Mainstay High.
Diversification Opportunities for Live Oak and Mainstay High
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Live and Mainstay is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health 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 Live Oak 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 Live Oak Health 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 Live Oak i.e., Live Oak and Mainstay High go up and down completely randomly.
Pair Corralation between Live Oak and Mainstay High
Assuming the 90 days horizon Live Oak is expected to generate 4.95 times less return on investment than Mainstay High. In addition to that, Live Oak is 4.48 times more volatile than Mainstay High Yield. It trades about 0.01 of its total potential returns per unit of risk. Mainstay High Yield is currently generating about 0.19 per unit of volatility. If you would invest 486.00 in Mainstay High Yield on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Mainstay High Yield or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Mainstay High Yield
Performance |
| Timeline |
| Live Oak Health |
| Mainstay High Yield |
Live Oak and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Mainstay High
The main advantage of trading using opposite Live Oak and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Mainstay High vs. Live Oak Health | Mainstay High vs. Health Biotchnology Portfolio | Mainstay High vs. Baillie Gifford Health | Mainstay High vs. Prudential Health Sciences |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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