Correlation Between Mainstay Convertible and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Mainstay Income 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 Income 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 Income Builder, you can compare the effects of market volatilities on Mainstay Convertible and Mainstay Income 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 Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Mainstay Income.
Diversification Opportunities for Mainstay Convertible and Mainstay Income
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Mainstay Income go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Mainstay Income
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 0.92 times more return on investment than Mainstay Income. However, Mainstay Vertible Fund is 1.09 times less risky than Mainstay Income. It trades about 0.32 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.13 per unit of risk. If you would invest 1,945 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Mainstay Income Builder
Performance |
| Timeline |
| Mainstay Convertible |
| Mainstay Income Builder |
Mainstay Convertible and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Mainstay Income
The main advantage of trading using opposite Mainstay Convertible and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's 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 |
| Mainstay Income vs. Capital Income Builder | Mainstay Income vs. Capital Income Builder | Mainstay Income vs. Capital Income Builder | Mainstay Income vs. HUMANA INC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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