Correlation Between Mainstay Moderate and Madison Diversified
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Madison Diversified 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 Moderate and Madison Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Moderate Etf and Madison Diversified Income, you can compare the effects of market volatilities on Mainstay Moderate and Madison Diversified 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 Moderate with a short position of Madison Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Madison Diversified.
Diversification Opportunities for Mainstay Moderate and Madison Diversified
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Madison is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Etf and Madison Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Diversified and Mainstay Moderate 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 Moderate Etf are associated (or correlated) with Madison Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Diversified has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Madison Diversified go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Madison Diversified
Assuming the 90 days horizon Mainstay Moderate is expected to generate 1.02 times less return on investment than Madison Diversified. In addition to that, Mainstay Moderate is 1.54 times more volatile than Madison Diversified Income. It trades about 0.17 of its total potential returns per unit of risk. Madison Diversified Income is currently generating about 0.26 per unit of volatility. If you would invest 1,265 in Madison Diversified Income on November 3, 2024 and sell it today you would earn a total of 27.00 from holding Madison Diversified Income or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Etf vs. Madison Diversified Income
Performance |
| Timeline |
| Mainstay Moderate Etf |
| Madison Diversified |
Mainstay Moderate and Madison Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Madison Diversified
The main advantage of trading using opposite Mainstay Moderate and Madison Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Madison Diversified 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 Madison Diversified will offset losses from the drop in Madison Diversified's long position.| Mainstay Moderate vs. Mainstay High Yield | Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Income Builder | Mainstay Moderate vs. Mainstay Large Cap |
| Madison Diversified vs. Leader Short Term Bond | Madison Diversified vs. Touchstone Ultra Short | Madison Diversified vs. Nuveen Short Term | Madison Diversified vs. Siit Ultra Short |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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