Correlation Between Mainstay Convertible and American Independence
Can any of the company-specific risk be diversified away by investing in both Mainstay Convertible and American Independence 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 American Independence 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 American Independence Kansas, you can compare the effects of market volatilities on Mainstay Convertible and American Independence 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 American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Convertible and American Independence.
Diversification Opportunities for Mainstay Convertible and American Independence
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mainstay and American is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Vertible Fund and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Mainstay Convertible i.e., Mainstay Convertible and American Independence go up and down completely randomly.
Pair Corralation between Mainstay Convertible and American Independence
Assuming the 90 days horizon Mainstay Vertible Fund is expected to generate 2.51 times more return on investment than American Independence. However, Mainstay Convertible is 2.51 times more volatile than American Independence Kansas. It trades about 0.14 of its potential returns per unit of risk. American Independence Kansas is currently generating about 0.17 per unit of risk. If you would invest 1,615 in Mainstay Vertible Fund on August 25, 2024 and sell it today you would earn a total of 319.00 from holding Mainstay Vertible Fund or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Mainstay Vertible Fund vs. American Independence Kansas
Performance |
| Timeline |
| Mainstay Convertible |
| American Independence |
Mainstay Convertible and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Convertible and American Independence
The main advantage of trading using opposite Mainstay Convertible and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Convertible position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence'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 |
| American Independence vs. Mainstay Vertible Fund | American Independence vs. Absolute Convertible Arbitrage | American Independence vs. Lord Abbett Vertible | American Independence vs. Lord Abbett Vertible |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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