Correlation Between Mainstay Balanced and Mainstay Vertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Balanced and Mainstay Vertible 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 Mainstay Balanced and Mainstay Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Balanced Fund and Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay Balanced and Mainstay Vertible 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 Mainstay Balanced with a short position of Mainstay Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Mainstay Vertible.
Diversification Opportunities for Mainstay Balanced and Mainstay Vertible
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Balanced Fund and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Vertible and Mainstay 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 Mainstay Balanced Fund are associated (or correlated) with Mainstay Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Vertible has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Mainstay Vertible go up and down completely randomly.
Pair Corralation between Mainstay Balanced and Mainstay Vertible
Assuming the 90 days horizon Mainstay Balanced is expected to generate 1.64 times less return on investment than Mainstay Vertible. In addition to that, Mainstay Balanced is 1.17 times more volatile than Mainstay Vertible Fund. It trades about 0.14 of its total potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.27 per unit of volatility. If you would invest 1,939 in Mainstay Vertible Fund on August 25, 2024 and sell it today you would earn a total of 53.00 from holding Mainstay Vertible Fund or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Balanced Fund vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Mainstay Balanced |
| Mainstay Vertible |
Mainstay Balanced and Mainstay Vertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Balanced and Mainstay Vertible
The main advantage of trading using opposite Mainstay Balanced and Mainstay Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Balanced position performs unexpectedly, Mainstay Vertible 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 Vertible will offset losses from the drop in Mainstay Vertible's long position.| Mainstay Balanced vs. Mainstay Sp 500 | Mainstay Balanced vs. Mainstay Balanced Fund | Mainstay Balanced vs. Mainstay Tax Advantaged | Mainstay Balanced vs. Mainstay Mackay Short |
| Mainstay Vertible vs. Mainstay Sp 500 | Mainstay Vertible vs. Mainstay Balanced Fund | Mainstay Vertible vs. Mainstay Balanced Fund | Mainstay Vertible vs. Mainstay Tax Advantaged |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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