Correlation Between Mainstay Convertible and Invesco Convertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Invesco Convertible 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 Invesco Convertible 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 Invesco Vertible Securities, you can compare the effects of market volatilities on Mainstay Convertible and Invesco Convertible 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 Invesco Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Invesco Convertible.
Diversification Opportunities for Mainstay Convertible and Invesco Convertible
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and INVESCO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Invesco Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Vertible Sec 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 Invesco Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Vertible Sec has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Invesco Convertible go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Invesco Convertible
Assuming the 90 days horizon Mainstay Convertible is expected to generate 1.68 times less return on investment than Invesco Convertible. But when comparing it to its historical volatility, Mainstay Vertible Fund is 1.22 times less risky than Invesco Convertible. It trades about 0.3 of its potential returns per unit of risk. Invesco Vertible Securities is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 2,402 in Invesco Vertible Securities on August 28, 2024 and sell it today you would earn a total of 121.00 from holding Invesco Vertible Securities or generate 5.04% 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. Invesco Vertible Securities
Performance |
| Timeline |
| Mainstay Convertible |
| Invesco Vertible Sec |
Mainstay Convertible and Invesco Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Invesco Convertible
The main advantage of trading using opposite Mainstay Convertible and Invesco Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Invesco Convertible 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 Invesco Convertible will offset losses from the drop in Invesco Convertible's long position.| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Map Equity | Mainstay Convertible vs. Aquagold International | Mainstay Convertible vs. Morningstar Unconstrained Allocation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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