Correlation Between Arrow Managed and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Mainstay High 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 Arrow Managed and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Mainstay High Yield, you can compare the effects of market volatilities on Arrow Managed and Mainstay High 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 Arrow Managed with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Mainstay High.
Diversification Opportunities for Arrow Managed and Mainstay High
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Mainstay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Arrow Managed i.e., Arrow Managed and Mainstay High go up and down completely randomly.
Pair Corralation between Arrow Managed and Mainstay High
Assuming the 90 days horizon Arrow Managed is expected to generate 1.73 times less return on investment than Mainstay High. In addition to that, Arrow Managed is 5.18 times more volatile than Mainstay High Yield. It trades about 0.01 of its total potential returns per unit of risk. Mainstay High Yield is currently generating about 0.09 per unit of volatility. If you would invest 1,177 in Mainstay High Yield on September 13, 2024 and sell it today you would earn a total of 33.00 from holding Mainstay High Yield or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Arrow Managed Futures vs. Mainstay High Yield
Performance |
| Timeline |
| Arrow Managed Futures |
| Mainstay High Yield |
Arrow Managed and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Mainstay High
The main advantage of trading using opposite Arrow Managed and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Mainstay High 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 Mainstay High will offset losses from the drop in Mainstay High's long position.| Arrow Managed vs. 1919 Financial Services | Arrow Managed vs. Davis Financial Fund | Arrow Managed vs. Vanguard Financials Index | Arrow Managed vs. Prudential Jennison Financial |
| Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap |
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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