Correlation Between Mainstay Convertible and Mainstay
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Mainstay 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 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 Sp 500, you can compare the effects of market volatilities on Mainstay Convertible and Mainstay 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Mainstay.
Diversification Opportunities for Mainstay Convertible and Mainstay
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Mainstay go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Mainstay
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 0.54 times more return on investment than Mainstay. However, Mainstay Vertible Fund is 1.85 times less risky than Mainstay. It trades about 0.31 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.16 per unit of risk. If you would invest 1,944 in Mainstay Vertible Fund on August 29, 2024 and sell it today you would earn a total of 64.00 from holding Mainstay Vertible Fund or generate 3.29% 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 Sp 500
Performance |
| Timeline |
| Mainstay Convertible |
| Mainstay Sp 500 |
Mainstay Convertible and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Mainstay
The main advantage of trading using opposite Mainstay Convertible and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay'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 |
| Mainstay vs. Vanguard Total Stock | Mainstay vs. Vanguard 500 Index | Mainstay vs. Vanguard Total Stock | Mainstay vs. Vanguard Total Stock |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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