Correlation Between Mainstay Moderate and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Mainstay Income 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 Mainstay Income 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 Mainstay Income Builder, you can compare the effects of market volatilities on Mainstay Moderate and Mainstay Income 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 Mainstay Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Mainstay Income.
Diversification Opportunities for Mainstay Moderate and Mainstay Income
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAINSTAY and Mainstay is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Growth and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder 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 Mainstay Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Mainstay Income go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Mainstay Income
Assuming the 90 days horizon Mainstay Moderate Growth is expected to generate 1.3 times more return on investment than Mainstay Income. However, Mainstay Moderate is 1.3 times more volatile than Mainstay Income Builder. It trades about 0.21 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.12 per unit of risk. If you would invest 1,649 in Mainstay Moderate Growth on August 29, 2024 and sell it today you would earn a total of 51.00 from holding Mainstay Moderate Growth or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Growth vs. Mainstay Income Builder
Performance |
| Timeline |
| Mainstay Moderate Growth |
| Mainstay Income Builder |
Mainstay Moderate and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Mainstay Income
The main advantage of trading using opposite Mainstay Moderate and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.The idea behind Mainstay Moderate Growth and Mainstay Income Builder pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Mainstay Income vs. Mainstay Sp 500 | Mainstay Income vs. Mainstay Vertible Fund | Mainstay Income vs. Mainstay Large Cap | Mainstay Income vs. Mainstay Map Equity |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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