Correlation Between Mainstay Convertible and Fidelity Convertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Fidelity 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 Fidelity 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 Fidelity Vertible Securities, you can compare the effects of market volatilities on Mainstay Convertible and Fidelity 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 Fidelity Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Fidelity Convertible.
Diversification Opportunities for Mainstay Convertible and Fidelity Convertible
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Fidelity Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Convertible 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 Fidelity Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Convertible has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Fidelity Convertible go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Fidelity Convertible
Assuming the 90 days horizon Mainstay Convertible is expected to generate 1.86 times less return on investment than Fidelity Convertible. But when comparing it to its historical volatility, Mainstay Vertible Fund is 1.01 times less risky than Fidelity Convertible. It trades about 0.05 of its potential returns per unit of risk. Fidelity Vertible Securities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,926 in Fidelity Vertible Securities on August 26, 2024 and sell it today you would earn a total of 783.00 from holding Fidelity Vertible Securities or generate 26.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. Fidelity Vertible Securities
Performance |
| Timeline |
| Mainstay Convertible |
| Fidelity Convertible |
Mainstay Convertible and Fidelity Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Fidelity Convertible
The main advantage of trading using opposite Mainstay Convertible and Fidelity Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Fidelity 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 Fidelity Convertible will offset losses from the drop in Fidelity 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 |
| Fidelity Convertible vs. Fidelity Puritan Fund | Fidelity Convertible vs. Fidelity Puritan Fund | Fidelity Convertible vs. Fidelity Pennsylvania Municipal | Fidelity Convertible vs. Fidelity Freedom Index |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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