Correlation Between Mainstay Vertible and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mainstay Vertible and Dow Jones 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 Vertible and Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Mainstay Vertible and Dow Jones 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 Vertible with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Vertible and Dow Jones.
Diversification Opportunities for Mainstay Vertible and Dow Jones
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Dow is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Mainstay Vertible 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mainstay Vertible i.e., Mainstay Vertible and Dow Jones go up and down completely randomly.
Pair Corralation between Mainstay Vertible and Dow Jones
Assuming the 90 days horizon Mainstay Vertible is expected to generate 1.83 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Mainstay Vertible Fund is 1.74 times less risky than Dow Jones. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,124,052 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 305,599 from holding Dow Jones Industrial or generate 7.41% 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. Dow Jones Industrial
Performance |
| Timeline |
Mainstay Vertible and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mainstay Vertible Fund
Pair trading matchups for Mainstay Vertible
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mainstay Vertible and Dow Jones
The main advantage of trading using opposite Mainstay Vertible and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Vertible position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mainstay Vertible vs. Mainstay Sp 500 | Mainstay Vertible vs. Mainstay Balanced Fund | Mainstay Vertible vs. Mainstay Balanced Fund | Mainstay Vertible vs. Mainstay Tax Advantaged |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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