Correlation Between Mainstay Balanced and Mainstay Short
Can any of the company-specific risk be diversified away by investing in both Mainstay Balanced and Mainstay Short 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 Short 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 Short Duration, you can compare the effects of market volatilities on Mainstay Balanced and Mainstay Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Mainstay Short.
Diversification Opportunities for Mainstay Balanced and Mainstay Short
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mainstay and Mainstay is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Balanced Fund and Mainstay Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Short Duration has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Mainstay Short go up and down completely randomly.
Pair Corralation between Mainstay Balanced and Mainstay Short
Assuming the 90 days horizon Mainstay Balanced Fund is expected to under-perform the Mainstay Short. In addition to that, Mainstay Balanced is 3.84 times more volatile than Mainstay Short Duration. It trades about -0.1 of its total potential returns per unit of risk. Mainstay Short Duration is currently generating about 0.17 per unit of volatility. If you would invest 956.00 in Mainstay Short Duration on November 28, 2024 and sell it today you would earn a total of 3.00 from holding Mainstay Short Duration or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Balanced Fund vs. Mainstay Short Duration
Performance |
| Timeline |
| Mainstay Balanced |
| Mainstay Short Duration |
Mainstay Balanced and Mainstay Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Balanced and Mainstay Short
The main advantage of trading using opposite Mainstay Balanced and Mainstay Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Balanced position performs unexpectedly, Mainstay Short 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 Short will offset losses from the drop in Mainstay Short's long position.| Mainstay Balanced vs. Franklin Lifesmart Retirement | Mainstay Balanced vs. Moderate Strategy Fund | Mainstay Balanced vs. Franklin Moderate Allocation | Mainstay Balanced vs. Voya Retirement Growth |
| Mainstay Short vs. Pace High Yield | Mainstay Short vs. Ab High Income | Mainstay Short vs. Artisan High Income | Mainstay Short vs. Access Flex High |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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