Correlation Between MainStay CBRE and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MainStay CBRE and Dow Jones 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 CBRE and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MainStay CBRE Global and Dow Jones Industrial, you can compare the effects of market volatilities on MainStay CBRE and Dow Jones 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 CBRE with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MainStay CBRE and Dow Jones.
Diversification Opportunities for MainStay CBRE and Dow Jones
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between MainStay and Dow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and MainStay CBRE 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 CBRE Global are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MainStay CBRE i.e., MainStay CBRE and Dow Jones go up and down completely randomly.
Pair Corralation between MainStay CBRE and Dow Jones
Given the investment horizon of 90 days MainStay CBRE is expected to generate 1.15 times less return on investment than Dow Jones. In addition to that, MainStay CBRE is 1.5 times more volatile than Dow Jones Industrial. It trades about 0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of volatility. If you would invest 3,543,042 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 886,609 from holding Dow Jones Industrial or generate 25.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MainStay CBRE Global vs. Dow Jones Industrial
Performance |
| Timeline |
MainStay CBRE and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MainStay CBRE Global
Pair trading matchups for MainStay CBRE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MainStay CBRE and Dow Jones
The main advantage of trading using opposite MainStay CBRE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MainStay CBRE position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| MainStay CBRE vs. Ares Dynamic Credit | MainStay CBRE vs. PGIM Short Duration | MainStay CBRE vs. Ecofin Sustainable And | MainStay CBRE vs. Aberdeen Total Dynamic |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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