Correlation Between Mainstay Convertible and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Investec Emerging 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 Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Mainstay Convertible and Investec Emerging 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Investec Emerging.
Diversification Opportunities for Mainstay Convertible and Investec Emerging
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mainstay and Investec is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Investec Emerging go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Investec Emerging
Assuming the 90 days horizon Mainstay Vertible Fund is expected to under-perform the Investec Emerging. In addition to that, Mainstay Convertible is 1.87 times more volatile than Investec Emerging Markets. It trades about -0.31 of its total potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.16 per unit of volatility. If you would invest 1,140 in Investec Emerging Markets on October 10, 2024 and sell it today you would lose (20.00) from holding Investec Emerging Markets or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Investec Emerging Markets
Performance |
| Timeline |
| Mainstay Convertible |
| Investec Emerging Markets |
Mainstay Convertible and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Investec Emerging
The main advantage of trading using opposite Mainstay Convertible and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging'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 |
| Investec Emerging vs. Gabelli Convertible And | Investec Emerging vs. Mainstay Vertible Fund | Investec Emerging vs. Columbia Convertible Securities | Investec Emerging vs. Lord Abbett Vertible |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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