Correlation Between Mainstay Convertible and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Sentinel Small 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 Sentinel Small 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 Sentinel Small, you can compare the effects of market volatilities on Mainstay Convertible and Sentinel Small 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 Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Sentinel Small.
Diversification Opportunities for Mainstay Convertible and Sentinel Small
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Sentinel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small 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 Sentinel Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Small has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Sentinel Small go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Sentinel Small
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 0.48 times more return on investment than Sentinel Small. However, Mainstay Vertible Fund is 2.1 times less risky than Sentinel Small. It trades about -0.28 of its potential returns per unit of risk. Sentinel Small is currently generating about -0.37 per unit of risk. If you would invest 1,947 in Mainstay Vertible Fund on October 11, 2024 and sell it today you would lose (71.00) from holding Mainstay Vertible Fund or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Sentinel Small
Performance |
| Timeline |
| Mainstay Convertible |
| Sentinel Small |
Mainstay Convertible and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Sentinel Small
The main advantage of trading using opposite Mainstay Convertible and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Sentinel Small 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 Sentinel Small will offset losses from the drop in Sentinel Small'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 |
| Sentinel Small vs. Absolute Convertible Arbitrage | Sentinel Small vs. Fidelity Vertible Securities | Sentinel Small vs. Mainstay Vertible Fund | Sentinel Small 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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