Correlation Between Mainstay Convertible and Blackrock Inflation
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Blackrock Inflation 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 Blackrock Inflation 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 Blackrock Inflation Protected, you can compare the effects of market volatilities on Mainstay Convertible and Blackrock Inflation 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 Blackrock Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Blackrock Inflation.
Diversification Opportunities for Mainstay Convertible and Blackrock Inflation
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Blackrock is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Blackrock Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Inflation 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 Blackrock Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Inflation has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Blackrock Inflation go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Blackrock Inflation
Assuming the 90 days horizon Mainstay Vertible Fund is expected to under-perform the Blackrock Inflation. In addition to that, Mainstay Convertible is 2.11 times more volatile than Blackrock Inflation Protected. It trades about -0.23 of its total potential returns per unit of risk. Blackrock Inflation Protected is currently generating about -0.28 per unit of volatility. If you would invest 968.00 in Blackrock Inflation Protected on October 16, 2024 and sell it today you would lose (13.00) from holding Blackrock Inflation Protected or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Blackrock Inflation Protected
Performance |
| Timeline |
| Mainstay Convertible |
| Blackrock Inflation |
Mainstay Convertible and Blackrock Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Blackrock Inflation
The main advantage of trading using opposite Mainstay Convertible and Blackrock Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Blackrock Inflation 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 Blackrock Inflation will offset losses from the drop in Blackrock Inflation'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 |
| Blackrock Inflation vs. Absolute Convertible Arbitrage | Blackrock Inflation vs. Mainstay Vertible Fund | Blackrock Inflation vs. Columbia Convertible Securities | Blackrock Inflation vs. Virtus 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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