Correlation Between Mainstay Convertible and American Funds
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and American Funds 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 American Funds 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 American Funds Inflation, you can compare the effects of market volatilities on Mainstay Convertible and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and American Funds.
Diversification Opportunities for Mainstay Convertible and American Funds
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and American is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and American Funds go up and down completely randomly.
Pair Corralation between Mainstay Convertible and American Funds
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 1.43 times more return on investment than American Funds. However, Mainstay Convertible is 1.43 times more volatile than American Funds Inflation. It trades about 0.06 of its potential returns per unit of risk. American Funds Inflation is currently generating about 0.02 per unit of risk. If you would invest 1,701 in Mainstay Vertible Fund on August 30, 2024 and sell it today you would earn a total of 306.00 from holding Mainstay Vertible Fund or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. American Funds Inflation
Performance |
| Timeline |
| Mainstay Convertible |
| American Funds Inflation |
Mainstay Convertible and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and American Funds
The main advantage of trading using opposite Mainstay Convertible and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Mainstay Convertible vs. Versatile Bond Portfolio | Mainstay Convertible vs. Barings Active Short | Mainstay Convertible vs. Bbh Intermediate Municipal | Mainstay Convertible vs. Transamerica Funds |
| American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. HUMANA INC | American Funds vs. Aquagold International | American Funds vs. Barloworld Ltd ADR |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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