Correlation Between Mainstay Moderate and Us Government
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Mainstay Moderate and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Us Government.
Diversification Opportunities for Mainstay Moderate and Us Government
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and RGVCX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Etf and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Us Government go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Us Government
Assuming the 90 days horizon Mainstay Moderate Etf is expected to generate 1.76 times more return on investment than Us Government. However, Mainstay Moderate is 1.76 times more volatile than Us Government Securities. It trades about 0.15 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.18 per unit of risk. If you would invest 1,265 in Mainstay Moderate Etf on November 18, 2024 and sell it today you would earn a total of 19.00 from holding Mainstay Moderate Etf or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Etf vs. Us Government Securities
Performance |
| Timeline |
| Mainstay Moderate Etf |
| Us Government Securities |
Mainstay Moderate and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Us Government
The main advantage of trading using opposite Mainstay Moderate and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Mainstay Moderate vs. Mainstay Sp 500 | Mainstay Moderate vs. Mainstay Balanced Fund | Mainstay Moderate vs. Mainstay Balanced Fund | Mainstay Moderate vs. Mainstay Tax Advantaged |
| Us Government vs. Diversified International Fund | Us Government vs. Aqr Diversified Arbitrage | Us Government vs. Stone Ridge Diversified | Us Government vs. Jhancock Diversified Macro |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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