Correlation Between MainStay CBRE and MFS Government
Can any of the company-specific risk be diversified away by investing in both MainStay CBRE and MFS 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 CBRE and MFS Government 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 MFS Government Markets, you can compare the effects of market volatilities on MainStay CBRE and MFS 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 CBRE with a short position of MFS Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of MainStay CBRE and MFS Government.
Diversification Opportunities for MainStay CBRE and MFS Government
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MainStay and MFS is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and MFS Government Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Government Markets 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 MFS Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Government Markets has no effect on the direction of MainStay CBRE i.e., MainStay CBRE and MFS Government go up and down completely randomly.
Pair Corralation between MainStay CBRE and MFS Government
Given the investment horizon of 90 days MainStay CBRE Global is expected to generate 1.73 times more return on investment than MFS Government. However, MainStay CBRE is 1.73 times more volatile than MFS Government Markets. It trades about -0.08 of its potential returns per unit of risk. MFS Government Markets is currently generating about -0.18 per unit of risk. If you would invest 1,386 in MainStay CBRE Global on August 31, 2024 and sell it today you would lose (27.00) from holding MainStay CBRE Global or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MainStay CBRE Global vs. MFS Government Markets
Performance |
| Timeline |
| MainStay CBRE Global |
| MFS Government Markets |
MainStay CBRE and MFS Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MainStay CBRE and MFS Government
The main advantage of trading using opposite MainStay CBRE and MFS Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MainStay CBRE position performs unexpectedly, MFS 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 MFS Government will offset losses from the drop in MFS Government's 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 |
| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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