Correlation Between Mainstay Convertible and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Growth, you can compare the effects of market volatilities on Mainstay Convertible and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Mainstay Moderate.
Diversification Opportunities for Mainstay Convertible and Mainstay Moderate
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Mainstay Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Growth has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Mainstay Moderate
Assuming the 90 days horizon Mainstay Convertible is expected to generate 1.46 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Mainstay Vertible Fund is 1.25 times less risky than Mainstay Moderate. It trades about 0.07 of its potential returns per unit of risk. Mainstay Moderate Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,330 in Mainstay Moderate Growth on September 3, 2024 and sell it today you would earn a total of 376.00 from holding Mainstay Moderate Growth or generate 28.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Mainstay Moderate Growth
Performance |
| Timeline |
| Mainstay Convertible |
| Mainstay Moderate Growth |
Mainstay Convertible and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Mainstay Moderate
The main advantage of trading using opposite Mainstay Convertible and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Allianzgi Vertible Fund |
| Mainstay Moderate vs. Dodge Cox Emerging | Mainstay Moderate vs. Templeton Emerging Markets | Mainstay Moderate vs. Arrow Managed Futures | Mainstay Moderate vs. T Rowe Price |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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