Correlation Between Mainstay Balanced and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Mainstay Balanced and Mainstay Large 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 Large 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 Large Cap, you can compare the effects of market volatilities on Mainstay Balanced and Mainstay Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Mainstay Large.
Diversification Opportunities for Mainstay Balanced and Mainstay Large
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Balanced Fund and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Mainstay Large go up and down completely randomly.
Pair Corralation between Mainstay Balanced and Mainstay Large
Assuming the 90 days horizon Mainstay Balanced is expected to generate 1.69 times less return on investment than Mainstay Large. But when comparing it to its historical volatility, Mainstay Balanced Fund is 2.61 times less risky than Mainstay Large. It trades about 0.12 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Mainstay Large Cap on September 3, 2024 and sell it today you would earn a total of 86.00 from holding Mainstay Large Cap or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Balanced Fund vs. Mainstay Large Cap
Performance |
| Timeline |
| Mainstay Balanced |
| Mainstay Large Cap |
Mainstay Balanced and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Balanced and Mainstay Large
The main advantage of trading using opposite Mainstay Balanced and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Balanced position performs unexpectedly, Mainstay Large 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 Large will offset losses from the drop in Mainstay Large'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 Large vs. Ab Value Fund | Mainstay Large vs. Arrow Managed Futures | Mainstay Large vs. Sei Daily Income | Mainstay Large vs. T Rowe Price |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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