Correlation Between Mainstay Balanced and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Mainstay Balanced and Mainstay Income 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 Income 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 Income Builder, you can compare the effects of market volatilities on Mainstay Balanced and Mainstay Income 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 Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Mainstay Income.
Diversification Opportunities for Mainstay Balanced and Mainstay Income
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Mainstay is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Balanced Fund and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Mainstay Income go up and down completely randomly.
Pair Corralation between Mainstay Balanced and Mainstay Income
Assuming the 90 days horizon Mainstay Balanced is expected to generate 1.26 times less return on investment than Mainstay Income. But when comparing it to its historical volatility, Mainstay Balanced Fund is 1.17 times less risky than Mainstay Income. It trades about 0.13 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,786 in Mainstay Income Builder on September 3, 2024 and sell it today you would earn a total of 345.00 from holding Mainstay Income Builder or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Balanced Fund vs. Mainstay Income Builder
Performance |
| Timeline |
| Mainstay Balanced |
| Mainstay Income Builder |
Mainstay Balanced and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Balanced and Mainstay Income
The main advantage of trading using opposite Mainstay Balanced and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Balanced position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.| Mainstay Balanced vs. Wells Fargo Funds | Mainstay Balanced vs. General Money Market | Mainstay Balanced vs. First American Funds | Mainstay Balanced vs. Blackrock Exchange Portfolio |
| Mainstay Income vs. Mainstay Sp 500 | Mainstay Income vs. Mainstay Balanced Fund | Mainstay Income vs. Mainstay Balanced Fund |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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