Correlation Between Mainstay Moderate and Pinnacle Sherman
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Pinnacle Sherman 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 Pinnacle Sherman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Moderate Growth and Pinnacle Sherman Multi Strategy, you can compare the effects of market volatilities on Mainstay Moderate and Pinnacle Sherman 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 Pinnacle Sherman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Pinnacle Sherman.
Diversification Opportunities for Mainstay Moderate and Pinnacle Sherman
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Pinnacle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Growth and Pinnacle Sherman Multi Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Sherman Multi 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 Growth are associated (or correlated) with Pinnacle Sherman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Sherman Multi has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Pinnacle Sherman go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Pinnacle Sherman
Assuming the 90 days horizon Mainstay Moderate is expected to generate 2.44 times less return on investment than Pinnacle Sherman. But when comparing it to its historical volatility, Mainstay Moderate Growth is 1.43 times less risky than Pinnacle Sherman. It trades about 0.16 of its potential returns per unit of risk. Pinnacle Sherman Multi Strategy is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,340 in Pinnacle Sherman Multi Strategy on August 24, 2024 and sell it today you would earn a total of 75.00 from holding Pinnacle Sherman Multi Strategy or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Growth vs. Pinnacle Sherman Multi Strateg
Performance |
| Timeline |
| Mainstay Moderate Growth |
| Pinnacle Sherman Multi |
Mainstay Moderate and Pinnacle Sherman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Pinnacle Sherman
The main advantage of trading using opposite Mainstay Moderate and Pinnacle Sherman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Pinnacle Sherman 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 Pinnacle Sherman will offset losses from the drop in Pinnacle Sherman's long position.| Mainstay Moderate vs. Great West Government Mortgage | Mainstay Moderate vs. Dws Government Money | Mainstay Moderate vs. Blackrock Government Bond | Mainstay Moderate vs. Inverse Government Long |
| Pinnacle Sherman vs. HUMANA INC | Pinnacle Sherman vs. Aquagold International | Pinnacle Sherman vs. Barloworld Ltd ADR | Pinnacle Sherman vs. Morningstar Unconstrained Allocation |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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