Correlation Between Mainstay Convertible and Energy Basic
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and Energy Basic 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 Energy Basic 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 Energy Basic Materials, you can compare the effects of market volatilities on Mainstay Convertible and Energy Basic 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 Energy Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and Energy Basic.
Diversification Opportunities for Mainstay Convertible and Energy Basic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Energy is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and Energy Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Basic Materials 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 Energy Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Basic Materials has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and Energy Basic go up and down completely randomly.
Pair Corralation between Mainstay Convertible and Energy Basic
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 0.52 times more return on investment than Energy Basic. However, Mainstay Vertible Fund is 1.94 times less risky than Energy Basic. It trades about 0.11 of its potential returns per unit of risk. Energy Basic Materials is currently generating about 0.03 per unit of risk. If you would invest 1,751 in Mainstay Vertible Fund on August 29, 2024 and sell it today you would earn a total of 199.00 from holding Mainstay Vertible Fund or generate 11.36% 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. Energy Basic Materials
Performance |
| Timeline |
| Mainstay Convertible |
| Energy Basic Materials |
Mainstay Convertible and Energy Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and Energy Basic
The main advantage of trading using opposite Mainstay Convertible and Energy Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, Energy Basic 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 Energy Basic will offset losses from the drop in Energy Basic's long position.| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible vs. Mainstay Map Equity |
| Energy Basic vs. Volumetric Fund Volumetric | Energy Basic vs. Versatile Bond Portfolio | Energy Basic vs. Growth Fund Of | Energy Basic vs. Qs Growth Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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