Correlation Between Mainstay Convertible and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Equity Growth 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 Equity Growth 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 Equity Growth Fund, you can compare the effects of market volatilities on Mainstay Convertible and Equity Growth 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 Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Equity Growth.
Diversification Opportunities for Mainstay Convertible and Equity Growth
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mainstay and Equity is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Equity Growth go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Equity Growth
Assuming the 90 days horizon Mainstay Convertible is expected to generate 82.86 times less return on investment than Equity Growth. But when comparing it to its historical volatility, Mainstay Vertible Fund is 86.39 times less risky than Equity Growth. It trades about 0.05 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Equity Growth Fund on October 10, 2024 and sell it today you would earn a total of 1,137 from holding Equity Growth Fund or generate 50.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Equity Growth Fund
Performance |
| Timeline |
| Mainstay Convertible |
| Equity Growth |
Mainstay Convertible and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Equity Growth
The main advantage of trading using opposite Mainstay Convertible and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth'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 |
| Equity Growth vs. Fidelity Advisor Gold | Equity Growth vs. The Gold Bullion | Equity Growth vs. Gamco Global Gold | Equity Growth vs. Europac Gold 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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