Correlation Between MainStay CBRE and Ecofin Sustainable
Can any of the company-specific risk be diversified away by investing in both MainStay CBRE and Ecofin Sustainable 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 Ecofin Sustainable 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 Ecofin Sustainable And, you can compare the effects of market volatilities on MainStay CBRE and Ecofin Sustainable 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 Ecofin Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of MainStay CBRE and Ecofin Sustainable.
Diversification Opportunities for MainStay CBRE and Ecofin Sustainable
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MainStay and Ecofin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and Ecofin Sustainable And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Sustainable And 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 Ecofin Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Sustainable And has no effect on the direction of MainStay CBRE i.e., MainStay CBRE and Ecofin Sustainable go up and down completely randomly.
Pair Corralation between MainStay CBRE and Ecofin Sustainable
Given the investment horizon of 90 days MainStay CBRE Global is expected to generate 1.6 times more return on investment than Ecofin Sustainable. However, MainStay CBRE is 1.6 times more volatile than Ecofin Sustainable And. It trades about -0.08 of its potential returns per unit of risk. Ecofin Sustainable And is currently generating about -0.14 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MainStay CBRE Global vs. Ecofin Sustainable And
Performance |
| Timeline |
| MainStay CBRE Global |
| Ecofin Sustainable And |
MainStay CBRE and Ecofin Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MainStay CBRE and Ecofin Sustainable
The main advantage of trading using opposite MainStay CBRE and Ecofin Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MainStay CBRE position performs unexpectedly, Ecofin Sustainable 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 Ecofin Sustainable will offset losses from the drop in Ecofin Sustainable'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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