Correlation Between Mainstay Balanced and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Mainstay Balanced and Mainstay Mackay 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 Mackay 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 Mackay Infrastructure, you can compare the effects of market volatilities on Mainstay Balanced and Mainstay Mackay 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 Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Mainstay Mackay.
Diversification Opportunities for Mainstay Balanced and Mainstay Mackay
-0.55 | Correlation Coefficient |
Excellent 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 Mackay Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Infr 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 Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Infr has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Mainstay Balanced and Mainstay Mackay
Assuming the 90 days horizon Mainstay Balanced Fund is expected to generate 1.87 times more return on investment than Mainstay Mackay. However, Mainstay Balanced is 1.87 times more volatile than Mainstay Mackay Infrastructure. It trades about 0.18 of its potential returns per unit of risk. Mainstay Mackay Infrastructure is currently generating about -0.06 per unit of risk. If you would invest 3,213 in Mainstay Balanced Fund on August 26, 2024 and sell it today you would earn a total of 67.00 from holding Mainstay Balanced Fund or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Balanced Fund vs. Mainstay Mackay Infrastructure
Performance |
| Timeline |
| Mainstay Balanced |
| Mainstay Mackay Infr |
Mainstay Balanced and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Balanced and Mainstay Mackay
The main advantage of trading using opposite Mainstay Balanced and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Balanced position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.The idea behind Mainstay Balanced Fund and Mainstay Mackay Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Mainstay Mackay vs. Mainstay Tax Free | Mainstay Mackay vs. Mainstay Large Cap | Mainstay Mackay vs. Mainstay Large Cap | Mainstay Mackay vs. Mainstay Large Cap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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