Correlation Between Mainstay Convertible and Invesco Floating
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Invesco Floating 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 Convertible and Invesco Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Vertible Fund and Invesco Floating Rate, you can compare the effects of market volatilities on Mainstay Convertible and Invesco Floating 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 Convertible with a short position of Invesco Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Invesco Floating.
Diversification Opportunities for Mainstay Convertible and Invesco Floating
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mainstay and Invesco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Invesco Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Floating Rate and Mainstay Convertible 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 Vertible Fund are associated (or correlated) with Invesco Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Floating Rate has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Invesco Floating go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Invesco Floating
Assuming the 90 days horizon Mainstay Convertible is expected to generate 1.38 times less return on investment than Invesco Floating. In addition to that, Mainstay Convertible is 2.58 times more volatile than Invesco Floating Rate. It trades about 0.05 of its total potential returns per unit of risk. Invesco Floating Rate is currently generating about 0.17 per unit of volatility. If you would invest 565.00 in Invesco Floating Rate on October 19, 2024 and sell it today you would earn a total of 103.00 from holding Invesco Floating Rate or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Invesco Floating Rate
Performance |
| Timeline |
| Mainstay Convertible |
| Invesco Floating Rate |
Mainstay Convertible and Invesco Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Invesco Floating
The main advantage of trading using opposite Mainstay Convertible and Invesco Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Invesco Floating 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 Invesco Floating will offset losses from the drop in Invesco Floating's long position.| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible vs. Mainstay Sp 500 | Mainstay Convertible vs. Mainstay Large Cap |
| Invesco Floating vs. Mainstay Vertible Fund | Invesco Floating vs. Virtus Convertible | Invesco Floating vs. Rationalpier 88 Convertible | Invesco Floating vs. Advent Claymore Convertible |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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