Correlation Between Locorr Market and Mainstay
Can any of the company-specific risk be diversified away by investing in both Locorr Market and Mainstay 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 Locorr Market and Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Market Trend and Mainstay Sp 500, you can compare the effects of market volatilities on Locorr Market and Mainstay 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 Locorr Market with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Mainstay.
Diversification Opportunities for Locorr Market and Mainstay
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Locorr and Mainstay is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and Locorr Market 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 Locorr Market Trend are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Locorr Market i.e., Locorr Market and Mainstay go up and down completely randomly.
Pair Corralation between Locorr Market and Mainstay
Assuming the 90 days horizon Locorr Market is expected to generate 45.26 times less return on investment than Mainstay. But when comparing it to its historical volatility, Locorr Market Trend is 1.32 times less risky than Mainstay. It trades about 0.0 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,301 in Mainstay Sp 500 on November 4, 2024 and sell it today you would earn a total of 105.00 from holding Mainstay Sp 500 or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Market Trend vs. Mainstay Sp 500
Performance |
| Timeline |
| Locorr Market Trend |
| Mainstay Sp 500 |
Locorr Market and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Market and Mainstay
The main advantage of trading using opposite Locorr Market and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay's long position.| Locorr Market vs. L Abbett Growth | Locorr Market vs. Qs Large Cap | Locorr Market vs. Touchstone Large Cap | Locorr Market vs. Alliancebernstein Global Highome |
| Mainstay vs. Ambrus Core Bond | Mainstay vs. Blrc Sgy Mnp | Mainstay vs. Ms Global Fixed | Mainstay vs. Rationalpier 88 Convertible |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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